Can someone educate me on the wisdom of a 2% position?
How can a change in that impact one’s life in any significant way?
Why you think every single position has to impact one’s life?
I have a portfolio strategy, my current goal is tech 20%, financials 20%, REIT 15%, energy 10%, stalwart 10%, and cash & other sectors covers the remaining.
I have a sector view and select individual stocks and I spread sector bets across multiple names. For ex: on REIT, I like grocery anchored strip/ shopping centers, Single Family residential. or in case of energy, I have XOM, APA, and XOP (exploration), OIH (Services).
Within an sector there are sub-sectors you need names to diversify.
I accept (rather market humbled me enough) I am not a great stock picker, so I diversify across sectors and within sector various names. I don’t need to make a concentrated bet (it requires far higher skill, which I don’t have), I don’t need to beat Index, I don’t need to make any life altering money. My goal is to do at least 10% per year, irrespective of market performance, and my allocation is not bracketing Index.