How to Build a Stock Portfolio You Love

There’s nothing wrong with sticking to what you know.

Image courtesy of Pixabay

New investors often look to others for advice on where to put their money. It makes sense: they don’t know what they are doing so they ask people that do. While seeking out expert advice is good, it shouldn’t be the source of all your investing decisions.

Learning what to look for in a stock takes time and seeking help from others (whether it be a personal friend or someone online) is very useful. Even experienced investors can stand to learn something new. Learning how to read a balance sheet or what matters in an earnings report takes time and education.

It’s important to know, however, that it’s not good to invest in a business just because a ton of other people love it.

Building a portfolio you love takes time. As a recent college graduate (a.k.a. a broke man), it’s hard for me to put together a dream portfolio full of my favorite companies in the world. But nearly three years into my investing journey, I have a stock portfolio that I love. Here are the companies:

• Microsoft
• Disney
• Nike
• Mastercard
• Spotify
• Beyond Meat
• Dow Jones US Medical Devices Index Fund

This portfolio has earned me a nearly 33% return this year. Did I have to be a genius to pick these stocks out? No. Did I have to take a risk on a shaky growth or penny stock? No. I stuck to what I knew and went with my gut.

Investing in a company like Microsoft, Nike, or Disney doesn’t need much explanation. Those are some of the most recognizable brands in the world. You probably play on an Xbox or type in a Microsoft Word document. You may have Nike shoes on your feet. You’ve definitely seen a Disney movie.

Those are the “safe” names that can give you great returns. In over two years as a Microsoft shareholder, I’ve seen nearly a 50% return (it is my largest holding). Nike has given me over a 36% return in a year holding. Disney has given me a 12% return.

These are names that don’t take much thinking. You put your money there and hold. The other names do…