My $30,000 Portfolio
My wife and I are planning on buying our first home together. We have a nice nest egg for this occasion but have decided to grow it by investing in the current bull market. Taking a portion of the savings, I started a new portfolio. It contains the following stocks: Amazon (AMZN), Google (GOOG), Apple (AAPL), Nvidia (NVDA).
Ideally, we’d like to buy a home in about 12 months, so our window for potential gains is quite short. Therefore, I bought stocks that have upwards momentum (i.e. the stock price trend is generally positive). Right now this is how the portfolio is weighted (figures are rounded): AAPL — $6,337; NVDA — $13,518; AMZN — $4,812; GOOG — $5,625.
Here’s why I chose each stock:
Apple’s services division (which includes Apple Music, App store, etc.) has seen a nice increase in revenue recently. More importantly, the 10th anniversary iPhone is slated to be released this Fall. With strong customer loyalty, record iPhone sales are expected. Also, the stock is still considered undervalued and gives a hefty $0.63 dividend.
Currently, NVDA has been the top winner in the portfolio — already contributing over 21.5% net gain (I have multiple lots in all stocks — i.e. I bought more than once) in the eight weeks the portfolio has been open. Since the last quarterly report, the stock has been on a tear. With new and growing business in data centers, artificial intelligence, gaming, and autonomous vehicles, I’m confident this stock will be a great contributor.
What can I say about this company?! They’re a juggernaut, having changed the retail landscape. Not only is there untapped potential in retail but Amazon Web Services is still growing. AMZN has a lot of momentum with analysts giving it a 12 month price target of $1250.
Another juggernaut, GOOG was a must have. They basically own web advertising (along with Facebook) but have their hand in other ventures as well (e.g. AI, autonomous vehicles). Like AMZN, the stock has good momentum.
What kind of returns am I hoping to get in 12 months? Realistically, in the current bull market, I believe I can get at least 33% return or roughly $10,000. I’ll be using a buy and hold strategy and won’t actively trade (buy and sell). I think people go wrong when they try to time the market. Often they sell too early and miss out on more gains. How do I know if the stock market will keep rising? I don’t. A world war can start, another financial bubble could burst, Trump might tweet something idiotic causing a market meltdown. Who knows! Is investing $30k for a short amount of time risky? Of course it is but what I can do is minimize that risk by investing in strong companies, like those in my portfolio.
So here’s the score so far: $30,292 invested with a gain of $3,033 or just over 10% return. Not bad for a two month old portfolio!