Chapter Sixteen: Constructing a Common Stock Portfolio
Revised and updated | Build Wealth with Common Stocks: Market-Beating Strategies for the Individual Investor
Part III: Practices
Chapter Sixteen
Constructing a Common Stock Portfolio
CHAPTER SIXTEEN SUMMARY
On Constructing a Retail Common Stock Portfolio
Use the Model Portfolio template to build a portfolio or to evaluate the quality and value of your common stock holdings and targeted companies already on (or to add to) your watchlist. The Model Portfolio template is a suggested research tool; you are responsible for any final investment decisions if you choose to use it.
Create a portfolio profile that defines the mission, objectives, and strategies, providing a framework for targeting potential holdings that best fit your investment objectives.
To keep investing super simple, the template’s research approaches focus on the value a company offers its customers, the shareholder returns on common stock, the strength of senior management, the valuation multiples of common shares, the company’s downside risks, and the underlying stock’s risks.
Any stock that passes the screen becomes a candidate for further research and potential real-time purchase or active inclusion in your portfolio. Always do your due diligence and seek professional advice when needed.
Regardless of diversification, investing in common stocks involves the risk of losing your invested capital due to business failures, irrational market sentiment, negative financial news, analyst downgrades, and surprise events. Always invest with a margin of safety.
Click below to read or listen to the updated chapter in its entirety on Substack.
You can also click on the book’s QVI webpage, where you can read or listen to this and all previous completed chapters.
https://davidjwaldron.substack.com/p/build-wealth-with-common-socks
