approach to build up a 10k or 100 size portfolio | Alpha Quadrant by The Fifth Person

Questions › Category: Portfolio Management › approach to build up a 10k or 100 size portfolio

pin123 asked 1 year ago

the usual way that i know is to save up to a certain amount then only deploy the cash. what if you don’t have 10k, would you deploy the cash according to your goal? for example, the current aim is 10k size and 10% for each stock. so,when the time comes, but the amount saved is 6k. would you enter the market as if you have 10k?

1 Answers

1 Vote Up Vote Down

Victor Chng Staff answered 1 year ago

Hi Pin123,

If you have a small capital base, such as $10,000, you shouldn’t spread it across 10 stocks, as each position would only be $1,000. Investing such small amounts results in a higher percentage of brokerage fees. Personally, I believe that to keep brokerage costs reasonable, each investment should be at least $3,000.

So, what I would do is save up $3,000 and invest in one stock. Then, once I’ve saved another $3,000, I’d invest in a second stock, and so on, until I’m eventually diversified across 10 stocks. After that, I would begin topping up existing positions.

This approach uses a one-tranche strategy—meaning I only invest when the stock is significantly undervalued. It’s a practical method for those starting with small capital, and it’s the same strategy I used in my early years until I reached my first $100,000.