The 15% Rule for Stock Investing
00:00:00.000 | How do you generally think about this as someone who probably advocates for stock investing more
00:00:07.440 | than the average person? A lot of people talking about personal finance advocate for just index
00:00:12.160 | funds. But how do you think about concentration and diversification in that way?
00:00:16.160 | My personal rule of thumb that I use for my portfolio is 15%. I would not be comfortable
00:00:21.040 | having more than 15% of my net worth into an individual stock. But I will throw out the caveat
00:00:26.480 | there that the way that I personally invest is I am a long-term buy and hold investor. So for a
00:00:31.840 | company to become 15% of my portfolio, it would have had to earn its way in there. I would never
00:00:37.920 | put 15% from the get-go. I would probably stick to under 5% of my capital. And then if it just so
00:00:43.680 | happened to triple from there and become 15%, I would be personally comfortable with doing that.
00:00:48.960 | My personal, I call this my sleep well at night number, is 15%, but it's different for everybody.