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Boris S.'s avatar

In describing Systemic risk you mentioned macro risks of recessions, inflation, and crashes. I would add these risks may find themselves localized to a particular sector. For example, inflation may affect staples more than industrials. With that, I would say we should diversify a little bit among sectors. Don't hold 20 - 30 companies and have them all be staples. Also, the weighting is important - maybe even more so. You could have one bank holding T that outweighs everything, for example.

I'm a little guilty of having a lopsided portfolio as I am heavily tilted toward REITs.

As for the number, I am at 21 in my income portfolio and sometimes that feels like too much. 🥵 Personally, I would reduce the range from 20 - 30 to 10 - 20. But, that's just me.

My breakdown is ...

Business Development Companies - 5

Collateralized Loan Obligations (as a CEF) - 1

Energy (as a CEF) - 1

Financial Services - 1

mREIT - 1

REIT - 11

Staples - 1

I took some major steps in Jan 2025 to rebalance to that point and will now take a breather. There are more companies I want to research and understand but ... time ... never enough of it. 😉

Let's see how the year unfolds.

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