Being Aggressive In Your Portfolio

Written by The Dividend Guy on March 28, 2006

I think I could easily be criticized for being a pretty conservative investor. The nature of my investment focus, dividend paying investments, means that the majority of my holdings tend to be the big, established behemoth organizations with massive market capitalizations. Although there is always risk in investing, the stocks I tend to choose would not be in the same ballpark in terms of risk as a small capitalization start-up or growth company.

With that in mind, I have been flirting with the idea of allocating about 5% of my portfolio to those stocks that would be considered more aggressive. By that I mean stocks that I see a bright future for but have not fully established themselves yet. The next Microsoft or Home Depot, before their meteoric rise.

This probably all sounds fine and dandy. Sure, go ahead and pick that next Microsoft with these funds. Your response probably is, “…what the he!! do you think the rest of the world is trying to do - everyone is looking for the next Microsoft?” The response I am leaning towards is, you never know until you try.

Basically, I am comfortable with having up to 5% of my portfolio at risk in these types of investments at any given time. I am still young and can absorb the loss if (when) it comes. This is a risk I am willing to take for a great gain.


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