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Anonymous
Anonymous asked in Business & FinanceInvesting · 1 month ago

I am a Dividend Investor and only have 9 very strong companies in my portfolio. Is it really that risky to invest in only 9 companies?

Apple 

AT&TWalmart Starbucks Abbvie Astrazeneca 

Pfizer 

Bank Of America 

Kraft Heinz 

7 Answers

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  • Anonymous
    1 month ago

    None have good dividends.  Walmart is the only one with growth potential.  The rest are value has-beens.  Walmart just launched an $18B project to go international and to change customer interface ala Amazon.  The standard is NOT a balanced portfolio.

    The standard is 100% invested in the S&P500.  You do that by buying an etf called SPY.  Since 1978, SPY after taxes and with dividends has had an average annual return of 12.5%.  No other investment in the world did that.  You also need to buy all that SPY by investing the same $s every month in a Roth IRA.

  • kswck2
    Lv 7
    1 month ago

    Be diverse-but not SO diverse that you have no understanding of what those companies do or that you don't follow ALL of them. 

  • 1 month ago

    I've got 10 and alway looking to add more dividend paying stocks.  Something to think about, dividends are not alway guaranteed by a company.  One stock you have which I also hold is Kraft Heinz.  In 2019, they slashed their dividend  from .63 cents to .40 ents. At one time I held BAC, they too slashed their dividend down to almost nothing.  Another company I have held for a longtime is COP, they went from .76 cents a share down to .25 cents back in 2016.

    Nothing is guaranteed and you need to be watching the stocks you follow

  • Anonymous
    1 month ago

    What's riskier is investing in so many stocks that you don't know anything about them. 

    Around 10 is a good number. 

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  • ?
    Lv 7
    1 month ago

    If the dividends provide all the income you want, that`s probably fine. You have a mix of stable companies from diverse industries and countries. An economic disaster that forced more than one of those to reduce their dividends would be widespread enough to damage other stock categories as well.

    Diversification into many smaller companies would give you a greater expected return for the same low risk.

  • Anonymous
    1 month ago

    9 large caps are fine. A dividend fund is another option.  

    But, don't kid yourself in thinking dividend stocks are somehow "safe". They can go down 15-25%+ in a crash or bear market.

    Here is one I was considering. Vanguard probably has something similar possibly with a lower fee. 

    https://fundresearch.fidelity.com/mutual-funds/sum...

    Its important to understand it underperforms in up markets compared to the s&p 500.  If the market tanks 20%, maybe this only goes down 15%?  But its still money lost.

    Over the long run, the s&p 500 or a different index fund would probably outperform.

    But less dividends.

    I recently added Fidelity ZERO Total Market Index Fund to my monthly buys. I was buying their S&P 500 fund and own a lot but I determined that the above fund may have a little less downside if the big names fall more than the small ones.

  • hamel5
    Lv 7
    1 month ago

    If you've got a moderate size portfolio, it isn't necessarily risky.   

    Verizon is also a good dividend bet.  

    If you've got more than $125k invested - you should probably be in some other sectors -  international, growth etc. 

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