Number of Holding in Brokerage Account

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Number of Holding in Brokerage Account

Postby CliffB » Wed Jul 24, 2013 12:43 pm

My wife and I are with a broker who works for commissions. We currently have 36 individual positions/holding in our brokerage account. I found some brokerage metrics by Schwab indicating that the average is 6-8 positions.

What have been your experiences with the number of holdings. I think 36 is way too much and requires much more time than I had anticipated spending on managing the account. Am retired and feel this has become much like a full-time job.

Thanks!
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Re: Number of Holding in Brokerage Account

Postby dbr » Wed Jul 24, 2013 1:35 pm

We have 12 different investments which result from placing 5 different investment vehicles (funds, etc.) across accounts for 2 individuals at 4 different financial services companies, including need for taxable and tax deferred accounts. I'm not counting the existence of sweep accounts for holding cash at brokerages. One of the financial services companies is the broker that operates the directed brokerage link in the 401K, so maybe that doesn't count separate from the 401K.
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Re: Number of Holding in Brokerage Account

Postby jimkinny » Wed Jul 24, 2013 2:14 pm

I would not trust a broker who is paid to buy and sell. It is in the broker's best interest to do just that, the more often, the better it is for the broker, not you.

You might want to read about fiduciary duty, fee only advisers, the risk of owning individual stocks etc....maybe start with either the Boglehead Wiki or the book "TheBoglehead Guide to Investing".

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Re: Number of Holding in Brokerage Account

Postby Rainier » Wed Jul 24, 2013 2:17 pm

36 individual stocks? With a basket of 36 diverse stocks you'd be surprised how closely they follow the S&P 500. And of course, you can own the S&P 500 for virtually nothing.
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Re: Number of Holding in Brokerage Account

Postby CliffB » Wed Jul 24, 2013 3:28 pm

Thanks to all for the input. The brokerage account contains stocks, stock funds, bond funds, unit investment trust and REITS.

The total return (capital appreciation, dividends and interest) for the first half of 2013 was 2.8%. The S&P was 12.6% and the Dow was 13.7%.

My accountant just told me that he sees 1099s with between 20 and 40 positions.

Appreciate your input.
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Re: Number of Holding in Brokerage Account

Postby M1garand30064 » Wed Jul 24, 2013 3:57 pm

We really need more information to make good recommendations. Start with answering these questions:

1. How old are you?
2. How is your financial condition? (Debt, expenses vs income, etc)
3. Are you in retirement or plan to retire soon?
4. How long have you held each of the funds and how bad would the tax hit be if you sold them now?
5. Are you comfortable investing yourself, or do you need an adviser to help guide you along?
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Re: Number of Holding in Brokerage Account

Postby barnaclebob » Wed Jul 24, 2013 4:03 pm

CliffB wrote:Thanks to all for the input. The brokerage account contains stocks, stock funds, bond funds, unit investment trust and REITS.

The total return (capital appreciation, dividends and interest) for the first half of 2013 was 2.8%. The S&P was 12.6% and the Dow was 13.7%.

My accountant just told me that he sees 1099s with between 20 and 40 positions.

Appreciate your input.


What was the % return on the equity portion of your portfolio? Bonds funds haven't moved much this year so someone in retirement should have returned less than the S&P in most cases.

In any case the main reason for paying a broker to manager your portfolio is because either you cant, or you trust them with your money. Nearly anyone can manage a 3-4 fund portfolio and rebalancing. So if you are looking over your brokers shoulder all the time because you don't trust them then why are you paying a premium for their service?
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Re: Number of Holding in Brokerage Account

Postby CliffB » Fri Jul 26, 2013 5:05 pm

I appreciate the advice that people are offering and statistics that have been noted. My question is about the number of holdings in a brokerage account.

There was one response that requested personal information (age, tax impact, etc.). I don't provide personal information on a forum like this and am not sure why this information would result in identifying the number of positions that would be in a brokerage account.

As I noted in my original post, we currently have 36. My accountant said 20.

I'd appreciate it if any of you can just quote a number, your expertise would be appreciated.

Regards.
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Re: Number of Holding in Brokerage Account

Postby Easy Rhino » Fri Jul 26, 2013 5:51 pm

CliffB wrote:Thanks to all for the input. The brokerage account contains stocks, stock funds, bond funds, unit investment trust and REITS.



It would probably be simpler to just buy like 4 mutual funds.
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Re: Number of Holding in Brokerage Account

Postby stlutz » Fri Jul 26, 2013 5:56 pm

I'd appreciate it if any of you can just quote a number, your expertise would be appreciated


In a taxable brokerage account I think few here have more than 5 holdings, just because most folks here just own a limited number of indexed funds or ETFs. There are people on this board who do buy some individual stocks--you'd need them to chime in for how many they own.
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Re: Number of Holding in Brokerage Account

Postby ruralavalon » Fri Jul 26, 2013 5:59 pm

Seven positions total, being:
1) Six mutual funds; and
2) Treasury bonds.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
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Re: Number of Holding in Brokerage Account

Postby livesoft » Fri Jul 26, 2013 6:57 pm

We have between 1 and 4 investments per investment account.
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: Number of Holding in Brokerage Account

Postby G12 » Fri Jul 26, 2013 7:19 pm

In a rollover IRA brokerage, 15, of which 4 are individual TIPS holdings. In my taxable brokerage, 4 which are two individual stocks and two ETFs. In the joint brokerage there are 22 holdings, 13 individual stocks and 9 ETFs. I could go on about the Roth brokerages, etc, but it's pointless. I did this to myself, I didn't need a broker's involvement. :beer I can't complain about the returns tho, as they have been very good, other than I knew what was going to happen to the TIPS valuations at some point. Between this, residential and commercial investment properties, and a minority share in a successful business who has time for a real job? :D Nah, it really doesn't take up much time. I never claimed to be a 100% Boglehead, either.
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Re: Number of Holding in Brokerage Account

Postby Default User BR » Fri Jul 26, 2013 8:37 pm

livesoft wrote:We have between 1 and 4 investments per investment account.

One of mine has six holdings. The others are four or less.


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Re: Number of Holding in Brokerage Account

Postby Kevin M » Fri Jul 26, 2013 8:40 pm

OK, I'll answer you directly. That is too many positions if they are mainly mutual funds and ETFs, and not nearly enough if they are individual stocks. If it's a combination, then it's also too many.

If you don't know much about investing, you almost certainly would be better off with a single balanced fund or a simple three-fund portfolio (Total US stock index, Total International stock index, Total Bond market index). So one to three funds is enough.

The vast majority of folks on this forum use mutual funds (and/or ETFs), and there's a strong preference for index funds. There's lots and lots of evidence that this is more efficient than owning individual stocks.

Some here use more funds, but hopefully only after learning a lot and deciding that it makes sense for them to tilt away from total market funds. There also may be practical reasons for owning more funds in more accounts, but not in a single account.

Kevin
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