As alluded to in my 2019 summary, here are my investment plans for 2020 and beyond, as well as an explanation of my portfolio allocations.
At the end of each of my "Stock Of The Month" posts describing that month's particular buy(s), I list out all of my holdings followed by their individual current weighting at time of posting, color-coded for buy and hold. For example, here is December 2019's list:
NVIDIA (NVDA) 14.23%
Apple (AAPL) 13.29%
Amazon (AMZN) 12.31%
Tesla (TSLA) 10.77%
Microsoft (MSFT) 10.68%
Alphabet (GOOGL) 5.71%
Facebook (FB) 3.84%
Intuitive Surgical (ISRG) 3.54%
Adobe (ADBE) 2.47%
Salesforce (CRM) 2.16%
Visa (V) 2.13%
Nike (NKE) 2.07%
Costco Wholesale (COST) 2.06%
UnitedHealth Group (UNH) 2.02%
Intel (INTC) 1.90%
Comcast (CMCSA) 1.81%
Starbucks (SBUX) 1.68%
Waste Management (WM) 1.41%
Advanced Micro Devices (AMD) 1.03%
American Water Works (AWK) 0.95%
Autodesk (ADSK) 0.89%
Union Pacific (UNP) 0.83%
Norfolk Southern (NSC) 0.79%
CSX (CSX) 0.73%
Kansas City Southern (KSU) 0.35%
Canadian National Railway (CNI) 0.33%
While discussing stocks, I may refer to them as "16"s, "5"s, "2"s, or "1"s. For example, NVIDIA is a "16"; Canadian National Railway is a "1". This is referring to their individual targeted weighting, which does not change over time - i.e. there will always be four "16"s, three "5"s, seven "2"s, and seven "1"s, adding up to 100. (It is an idea borrowed from Warren Buffett's portfolio weighting in his Berkshire Hathaway portfolio, which historically has had 4-5 large holdings and 40-something other holdings.)
If I were to list out all of my holdings followed by their targeted weighting, it would look like this:
Amazon (AMZN) 16%
Apple (AAPL) 16%
Microsoft (MSFT) 16%
NVIDIA (NVDA) 16%
Alphabet (GOOGL) 5%
Facebook (FB) 5%
Tesla (TSLA) 5%
Comcast (CMCSA) 2%
Costco Wholesale (COST) 2%
Intel (INTC) 2%
Nike (NKE) 2%
Starbucks (SBUX) 2%
UnitedHealth Group (UNH) 2%
Visa (V) 2%
American Water Works (AWK) 1%
Canadian National Railway (CNI) 1%
CSX (CSX) 1%
Kansas City Southern (KSU) 1%
Norfolk Southern (NSC) 1%
Union Pacific (UNP) 1%
Waste Management (WM) 1%
Adobe (ADBE) ??%
Advanced Micro Devices (AMD) ??%
Autodesk (ADSK) ??%
Intuitive Surgical (ISRG) ??%
Salesforce (CRM) ??%
Astute readers will notice that the current and targeted weightings are incongruent - particularly Telsa, and the "??" grouping.
Regarding Telsa: it is the Fifth Beatle of the "16"s. It originally was a proper "16", then I promoted Microsoft to take its place; now, it is officially a "5" (for things-must-add-up-to-one-hundred's sake) and unofficially a "16" (for the-reality-of-my-holdings's sake). (For what it's worth, Telsa is at least greater than a "5", and averages out the underweighting of Facebook within its grouping.)
Regarding the "??" grouping: yes, these "extra" stock holdings mean that my 16/5/2/1s will never add up to 100% of my portfolio. I am essentially attempting to stuff ten pounds of awesome into a five pound bag. However, I feel like the presence of "bench" stocks I like enough to own lends some stability to my portfolio if, for example, one of my "starter" stocks falters. Think of them as cash++...or a side slush fund.
So...with all of that out of the way, what are my investment plans for 2020 and beyond? In short, to make my primary investment ideas the properly primary holdings, such that the "16"s (and Tesla) are true "16"s.
Each of the "16"s (and Tesla) is from 2% to 6% short of their targeted allocation. And, since I am adding to my portfolio instead of reallocating existing funds, each purchase moves the goalposts a little bit further away.
It will likely take 2-3 years of monthly purchases to get each of Amazon, Apple, Microsoft, NVIDIA, and Tesla to reach 16% of my holdings - and today, I am committing to doing exactly that.
