Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Truth About “6G” - 30th Nov 20
Ancient Aztec Secret Could Lead To A $6.9 Billion Biotech Breakthrough - 30th Nov 20
AMD Ryzen Zen 3 NO UK MSRP Stock - 5600x, 5800x, 5900x 5950x Selling at DOUBLE FAKE MSRP Prices - 29th Nov 20
Stock Market Short-term Decision Time - 29th Nov 20
Look at These 2 Big Warning Signs for the U.S. Economy - 29th Nov 20
Dow Stock Market Short-term and Long-term Trend Analysis - 28th Nov 20
How To Spot The End Of An Excess Market Trend Phase – Part II - 28th Nov 20
BLOCKCHAIN INVESTMENT PRIMER - 28th Nov 20
The Gold Stocks Correction is Maturing - 28th Nov 20
Biden and Yellen Pushed Gold Price Down to $1,800 - 28th Nov 20
Sheffield Christmas Lights 2020 - Peace Gardens vs 2019 and 2018 - 28th Nov 20
MUST WATCH Before You Waste Money on Buying A New PC Computer System - 27th Nov 20
Gold: Insurance for Prudent Investors, Precious Metals Reduce Risk & Preserve Wealth - 27th Nov 20
How To Spot The End Of An Excess Market Trend Phase - 27th Nov 20
Snow Falling Effect Christmas Lights Outdoor Projector Amazon Review - 27th Nov 20
4 Reasons Why You Shouldn't Put off Your Roof Repairs - 27th Nov 20
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Commodities Investing, Does The Size of Your Portfolio Matter?

Commodities / Resources Investing Jan 06, 2010 - 09:57 AM GMT

By: Dudley_Baker

Commodities

Best Financial Markets Analysis ArticleIn the natural resource and precious metals sectors there are literally thousands of companies available from which to choose to include in one's portfolio. There are a lot of great companies and some, well, questionable choices. Screening out favorites might mean subscribing to several investment services and listening to the views of professionals. Then you must decide on how many of these companies in which to actually purchase shares.


All investors whether novice or professionals need to consider the size of their portfolios. What is big and what is small will depend on many factors.This is going to sound so simple but it is essential to the discussion as to whether 10, 20, 50 or 100 positions is right for you.

Factors to be considered:

1. The amount of monies you have to invest

This is one of the first questions to ask, 'how much money will you be investing in the natural resource sector'? Whether you have $5,000, $10,000, $100,000 or a million makes a huge difference, in my opinion.

Diversification - investors must not put all of their eggs in one basket but yet you do not want to spread your money so thin by buying too many positions. One analyst suggests a portfolio of 10 stocks, while another recommends investing no more than 5% in any one position.

As a rule of thumb, I would suggest the following guidelines:

Amount of Money To Be Invested

 

Number of Positions

$5,000 4
$10,000 4 - 6
$100,000 10 - 20
$1,000,000 20 - 50

The objective is to have enough money in each position so when we have a great up move that we will be greatly rewarded, but at the same time, in the event of negative news we are not over committed to any one position. A delicate balance, if you will, of your investment dollars with the number of positions you own.

2. Your time available to research and stay abreast of your investments

How much time do you devote to your investments? This is another significant issue in the size of your portfolio. If you only have a few hours a week or less, you must only carry a few positions as you will not have sufficient time to follow the price movements and news with a large portfolio.

If you have 6 to 8 hours a week or more to spend in following your portfolio then this would argue for you to have a larger portfolio.

3. Your skills of managing these investments

We all have different skills in life; some of us pay close attention to details while others do not. It is important for you to know yourself and what you are good at. If you are not a detail person then perhaps you would be more comfortable with a smaller portfolio.

I have several friends that when I ask, "do you still own xyz gold"? Their immediate reply is "I don't know." I get so frustrated. How in the world can you expect to make money and be a successful investor if you don't even know what you own as well as what you paid for the shares or warrants?

You must build a portfolio in any one of the popular online charting services which will allow you to keep up with all of your positions, prices, news, etc and this must be done using the Canadian symbols, not the U.S. symbols on these junior mining shares and/or warrants.

Amazingly, this will allow you to see within minutes each day the prices and stay abreast of all of the news stories on your companies and greatly relieve you of many hours of time. Also, you now know exactly what you own and keep this current by verifying your current holdings with your brokerage firm. If you want to follow additional companies that you don't currently own, great, but do so in a 'watch list', to be kept separate from your actual holdings.

Using these steps above will allow you to maintain a larger portfolio with ease.

Personally, I have about 90 different positions in the natural resource and mining sector in the common shares and long-term warrants on companies which I strongly believe will perform exceptionally well in the coming 18 to 24 months. I don't recommend this size of a portfolio to others but it works for me and I am very comfortable with my positions.

In the final analysis only you can decide what the correct size portfolio is for you taking into account all of the factors outlined above.

If you would like to know more about warrants, we encourage you to visit our website for an in-depth discussion of warrants, many examples, how to trade warrants and much more.

For those readers unfamiliar with our services:

  • PreciousMetalsWarrants.com provides an online database for all warrants trading on the natural resource companies in the United States and Canada.
  • InsidersInsights.com tracks the buying and selling of corporate insiders with a focus on the junior mining and natural resource sectors. Buy and Sell Alerts are issued as deemed relevant based upon our analysis.

We encourage all readers to sign up for our free weekly email.

Dudley Pierce Baker
Guadalajara/Ajijic, Mexico
Email: support@preciousmetalswarrants.com
Website: PreciousMetalsWarrants
Website: InsidersInsights

Dudley Pierce Baker is the owner and editor of Precious Metals Warrants and Insiders Insights. Articles are written by Dudley Baker along with contributing editors, Arnold Bock of Mendoza, Argentina and Lorimer Wilson of Toronto, Canada. PreciousMetalsWarrants provides an online subscription database for all warrants trading on junior mining and natural resource companies in the United States and Canada and a free weekly newsletter. InsidersInsights alerts subscribers when corporate insiders of a limited number of junior mining and natural resource companies are buying and selling.

Disclaimer/Disclosure Statement:PreciousMetalsWarrants.com is not an investment advisor and any reference to specific securities does not constitute a recommendation thereof. The opinions expressed herein are the express personal opinions of Dudley Baker. Neither the information, nor the opinions expressed should be construed as a solicitation to buy any securities mentioned in this Service. Examples given are only intended to make investors aware of the potential rewards of investing in Warrants. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions involving stocks or Warrants.

Dudley Pierce Baker Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules