Hello guys,
These days are very tough for investors, but I would say that this is normal. Corrections are part of the financials markets and they can be seen often as an opportunity.
In any case I am here to introduce you the second model portfolio: the Pure Stocks Portfolio.
This is a portfolio only made by single stocks, with very few limits:
There will be at least 10 stocks;
The portfolio will invest in stocks listed on U.S. exchanges (ADRs will be included)
Moreover there will be two type of trades: long term and speculative plays.
The two categories will follow different rules:
Even for the Pure Stock Portfolio I suggest you to use a broker where you can buy fractional shares, because it would be easier for you to buy the exact quantity for every stock.
Remember that every month I will suggest which stock to buy and the precise weight, in order to rebalance the weight of every stock in the portfolio. Of course, I will let you know about any asset allocation changes.
THE STOCKS
Meta Platform (FB): FB is the top holding of the Pure Stocks Portfolio.
I think that FB is the stock with the best risk-reward ratio among large caps right now. The company has a dominant position in the social network sector, and it is probably the best company to buy to enter in the metaverse business.
The recent fall made the stock valuation very appealing. The Blended P/E now stands at 18.9x, much lower than its 5-year average and the company is a unique story of growth and profitability (profit margin at 35%).
Finally, now the largest risk for the company is a "regulatory risk", but I don't see US politicians strong enough to take any action against FB (and all the tech megacaps). This is a great opportunity for the long term.