My Investment Strategy

July 17, 2023

In this post, I will share the general investing strategy I follow in my US portfolio.

The strategy I follow has remained largely unchanged since I started investing seriously in 2020.

I've also tweeted about it in the past which you can view here:


Overall, I only keep track of two metrics i.e., my portfolio's dividend yield and my portfolio's dividend growth rate. I want my dividend yield to be slightly higher than the dividend yield of the SP500 and I want my dividends to growth at a faster pace. By this, I hope to reinvest more dividends at a faster pace than compared to the SP500.

Besides my portfolio's dividend yield and dividend growth rate, I do not constrain myself in terms of what type of companies I buy. So, I am open to any attractive investment opportunity whether it is based on value, growth or quality.

This type of strategy is somewhat similar to the satellite and core strategy, the video below gives a good overview of this strategy.


So, my portfolio:

Core: Good dividend paying companies.
Satellite: Value, quality and growth companies.

In terms of number of holdings, I aim for 15-25 stocks. I feel like this is a good balance between diversification and concentration. My largest holding don't normally reach more than 15% of the overall portfolio while my top 10 position account for more than 50%.

For each stock in my portfolio, I try to estimate their intrinsic value by considering either their cash flows, dividends or assets. If the company is undervalued based on this exercise, I would potentially add it to my portfolio otherwise I wait for a better entry price. When I buy a stock, I also write a small summary containing: reasons for buying and the potential risks. If a stock becomes very expensive I usually trim the postion or sell completely and if it becomes very cheap I like to add to the position. 

My investment toolkit comprises of: tracking my own stocks or stocks I would potentially own, tracking my performance against the SP500, tracking my dividend income and estimating the value of stocks.

For tracking stocks, you can use yahoo finance or seeking alpha to create a watchlist. For the rest, I use google finance to track performance, dividend income and estimate the value of stocks.

In summary, I would describe my investment strategy as follows:

1. Portfolio is constructed with dividend yield and dividend growth at the core.
2. Portfolio comprises of 15-25 positions.
3. Before a stock enters the portfolio, I try to estimate the stock's intrinsic value.
4. If a stock enters the portfolio, I summarise the reasons and risks.
5. If a stock becomes very expensive I trim/sell and if it becomes very cheap I add/buy.
6. Finally, I actively keep track of performance, dividends, valuation of stocks and stocks I wish to potentially buy.

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