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QuestionsCategory: Portfolio ManagementPortfolio Weighting
KIMHONG HEE asked 5 months ago

Hi Victor,
Currently I have RM50K as capital & would like to start to built my portfolio. My target is to manage 10 stocks. If I divide RM50K to 10 stocks, I can only allocate RM5K for each stock. With this amount, only limited stock that I can look at.
My questions:

  1. Should I start with 2-3 stocks to have bigger allocation to each stock?
  2. With this small capital, should I just concentrate on SG/Mal market?

Regards.

1 Answers
Victor Chng answered 5 months ago

Hi Kim Hong,
 
To determine the number of stocks depend of your brokerage fee charges. You want to ensure that when you invest into a single stock, the percentage should be less than 1%. On my side, I am not sure what is the brokerage fee of Malaysia but I can do it from a Singapore perspective. 
 
If I will to convert your RM50K to Singapore dollars, the amount should be around $16K++. According to this amount I will only invest in 3-4 stocks with equal percentage. Do note that because of small capital, you have only one shot for each stock.
 
As for the market, it really depend on where are you comfortable investing. It does not matter if your capital is big or small. 
 
Hope this helps :)

KIMHONG HEE replied 5 months ago

Thank you Victor :)

Victor Chng replied 5 months ago

Welcome Kim Hong :)