I am not yet experienced enough to tell someone whether they have the right portfolio. If I did, probably I’ll be having the most ideal portfolio myself. But would like to offer a few thoughts for your considerations.
In constructing a portfolio there are primarily the following choices an investor is faced with:
1- What stocks to buy
2- What should be ideal allocation of capital among stocks
3- What is the best time to enter a stock
4- How long one should hold a stock
Scores of books, opinions and research are out there that offer contradictory viewpoints on these factors with strong empirical evidences to substantiate their arguments. There are equal number of proponents of concentration and diversification and equal number for “buy and hold forever” and rotation and so on. There is just no singe answer to these questions that has been universally accepted to hold true for every one.
As the cliché goes, time in market is what matters more than timing the market. Since you are still very young, you have time to experiment with different investing styles and see what works for you. Once you have been through couple of market cycles over the next few years, you will eventually figure out what style works for you. (Trust me that what you think works for you will change in next 3 years.) Many successful investors have self-admittedly gone through similar journey of this self-discovery.
One key thing you have to take care of is protecting your capital. To quote another well worn cliché, risk management is backbone of investing. If you can go through this learning period without losing a lot of your capital or even better make some decent returns, you are set to do well with all that experience and knowledge in the long run. To protect capital it’s important to choose the right companies and not worry too much about whether you are in the right sector or not. You can always allocate part of your capital to try some risky ideas in small or micro caps space but important to stay vigilant there.
Good luck with your investing journey.
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