Is the coffee can a half-barbell (ultra-safe low return, missing the high-flyers) strategy, or the Boglehead/Midas (set & leave decorrelated stocks) strategy?
Interesting article ! It makes sense to buy and hold forever. Some would get rotten but some would outshine the rest. However, in the current times when your portfolio is at your fingertip and availability of live tracking of stock ticker, how do you implement such strategy. Would you keep creating new portfolios as a sort of coffee can and move on to build new portfolio and on... in such case, how do you set the upper limit of portfolio in terms of no. of stocks and $ allocated to it?
Num Stocks: I don't have hard rules about number of stocks. If stocks go down over time, they matter less, and become inconsequential anyway.
$ allocated: If you're investing your own money, this answer is relatively straight forward. Only invest what you can afford to. At some point if you feel portfolio concentration is too high, you can always trim but that comes with a trade off. You may lose some of the benefits of the coffee can but then again, you should only put at risk what you're willing to live with (i.e sleep well with).
Of course, no right or wrong answers. Every person is different.
Is the coffee can a half-barbell (ultra-safe low return, missing the high-flyers) strategy, or the Boglehead/Midas (set & leave decorrelated stocks) strategy?
Interesting article ! It makes sense to buy and hold forever. Some would get rotten but some would outshine the rest. However, in the current times when your portfolio is at your fingertip and availability of live tracking of stock ticker, how do you implement such strategy. Would you keep creating new portfolios as a sort of coffee can and move on to build new portfolio and on... in such case, how do you set the upper limit of portfolio in terms of no. of stocks and $ allocated to it?
I am implementing it here on my Scorecard:
https://docs.google.com/spreadsheets/d/1tBrZEMFK9XNWxiqOxE8oiEp9ctPMU9DAgerltYHGVeg/edit#gid=1660889064
Num Stocks: I don't have hard rules about number of stocks. If stocks go down over time, they matter less, and become inconsequential anyway.
$ allocated: If you're investing your own money, this answer is relatively straight forward. Only invest what you can afford to. At some point if you feel portfolio concentration is too high, you can always trim but that comes with a trade off. You may lose some of the benefits of the coffee can but then again, you should only put at risk what you're willing to live with (i.e sleep well with).
Of course, no right or wrong answers. Every person is different.