First my warning. The best advice I can give is don’t take my advice. Second is, I am wrong more often than I am right. (However, Soros once said, if I am right one ought of three times I am happy)
I don’t often write my opinions regarding financial matters but right now things are getting interesting.
We have had the second largest bank failure announced this last Friday (SVB Silicon Valley Bank). »
I try to keep every investment less than 5% of your portfolio and spread across sectors.
Stock selections should be across a spectrum of sectors to maintain diversification. This is a challenge for me as one other consideration is to only buy what you know… and what I know is limited.
This means you will have a 20+ universe of stocks. It can be a challenge tracking more than say 30+ stocks.
I look for large cap stocks with a “moat” around them - competetive advantage
find one with a P/E of less than 15 (which is the market average over time) and I look for a forward P/E that is lower
than the current P/E - suggests improving earnings.
I buy stocks with a dividend - these are generally stocks that have been around for a while and I want one I expect
to be around 10 years from now. I prefer a dividend yield over 1.50.
It should be a market leader - again look at the market cap compared to others in the same sector.
Return on Equite (ROE) of over 10%/yr.
Is this stock “suitable”? Is it in my risk tolerance boundries and am I confortable with management, product, location etc
Speaking of management - I look for companies I trust - this is a challenge and it is important