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How to build a portfolio!

Your guide to getting started on the ASX!

Building a Portfolio of shares

The stock market is one of the biggest generators of wealth around.

Start building up a portfolio of shares over time. The stock market is one of the biggest generators of wealth around.

You can structure your portolio:

5 or 6 Core Stocks

Build a core of 5 to 6 large holidings in stable businesses

8 Quality Small Caps

Small Caps are great for diversification. Add exposure to different risks and industries.

6 Satellite Small Caps

Grow your wealth with fast growth Small Caps

 

Access our Full Investment Path today
portfolio_pie_chart

Invest in High-Growth ASX Small Caps

Ready to grow a strong portfolio with fast-growing stocks?

Accelerate with ASX Small Caps. With over 2,000 stocks to choose from, let us do the hard work for you. With our research, turn $1,000 into ….

Access Small Cap research now

Turn
$1000
Into:

Small Cap
Tip
Price
Market 
Price
Return
%
Afterpay (APT)
$2.51
$2.51
1.1%
$1,000
Paladin Energy (PDN)
$0.42
$0.42
1.1%
$1,000
Northern Star (NST)
$0.83
$0.83
1.1%
$1,000
Nick Scali (NCK)
$1.40
$1.40
1.1%
$1,000
Macquarie Telecom (MAQ)
$8.15
$8.15
1.1%
$1,000
Pilbara Minerals (PLS)
$0.32
$0.32
1.1%
$1,000

Where do Small Caps fit in my portfolio?

Don’t ignore Small Caps in your top tier stocks!

These should be quality companies. We have many examples of both Small Caps and Blue Chips that are stable businesses. Don’t ignore Small Caps in this space. A lot of little companies are excellent quality businesses.

How many stocks should I own?

What percentage of my portfolio should be in each stock?

The most important step is to start building an asset base. A good start is to build 5 or 6 large positions in companies that are substantial operating businesses.

  1. Own 5-6 Core Stocks

Substantial businesses mean they are able to be valued by fundamental investment criteria, and most will pay dividends.

Each day you should ask yourself: would I buy this stock today?

2. Each stock is 5-6% of your portfolio

Your positions should be relatively large  in the context of the portfolio, ranging from 5%-8% maximum of the total portfolio at current prices.

3. Buy Quality Companies

We have many examples of both Small Caps and Blue Chips that are stable businesses.

Don’t ignore Small Caps in this space. A lot of little companies are excellent quality businesses.

4. A Tier 1 Stock in our Portfolio

Our Small Cap Portfolio holds aluminium product manufacturer Capral (CAA), the telecommunications group Symbio (SYM) formerly MNF Limited (MNF). We won’t give all our Tier 1 stocks away here!

Why Choose
Under the Radar Report?

1yrs

Founded in 2011.

1.1%

Average return on all 300 Small Caps

1%

Stocks Taken Over

Our track record

Our results speak
for themselves

These stocks have surpassed their price targets, and our analysts expect continued bullish performance.

+1%

XRF

+1%

XRF

+1%

XRF

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Dive into our comprehensive sector analysis of the market leaders in large cap stocks.

Richard Hemming
Editor

FAQs

In our Small Cap portfolio we have 8 medium sized positions, which serve varied roles.

It’s competitive!

This is the area where the pruning generally occurs. Don’t be afraid to sell a stock.

Buy some stocks for forecast growth

The hope is that they grow into larger positions, we have over 100 stocks we cover across a broad range of sectors and risk profiles.

Check your Diversification

Some stocks in tier 2 should give exposure to different risks for your portfolio, not reflected in the Core. For example you may like stocks that give you US$ exposure, or a small cap financial stock for alternative investment exposure, and a quality Small Cap miner.

Investment Themes

Some stocks will have greater exposure to cyclical themes; while others are selected to offer good value, which can include paying substantial dividends.

Any investment requires review. Even money stuck in a bank account! Are you getting the best interest rate you can get?

Our advice is to review, review, review any asset you hold! Make your money work for you!

No investing is risk-free and you can’t guarantee that the first stock you pick will shoot the lights out. Through diversification you can reduce your risk and with Small Caps you can buy diversity cheaply.

Liquidity is a factor in entry and exiting Small Cap stocks. Buy slowly to mitigate liquidity factors. To be cautious, you buy only 10-20% of your anticipated holding to start with, and then you wait. For example, if you plan to invest $2,000 in a stock, you can start and buy $400 worth of shares. Patience is the key

Your investment risk profile will help you choose the Small Cap stocks that are right for you. Seek independent financial advice and regularly review your financial goals.

“One of our key mantras is that subscribers should buy cheap and be patient.”

We hunt for cheap Small Cap stocks as buying as cheap as you can will protect your portfolio risk.

We hold 6 smaller positions in stocks that could become tier 2 or even core.

Power in Small Caps

These stocks can really grow! You never know your luck and these small companies can grow into stable Tier 2 businesses. Small Caps

Each stock is only 0.5% of your portfolio

We have to be readily prepared to lose that sort of money with no regrets. Nobody, not even Warren Buffett or [INSERT THE NAME OF YOUR MOST ADMIRED INVESTOR HERE], gets them all right, even in bull markets.

Don’t invest too much at the start

One key to making money is minimising your losses, which means not investing too much initially. Don’t know how much to invest or how to start? It’s time to follow our investing pathway in Building Wealth From Scratch In the Stock Market. Start with your CORE plan today.

Reduce your risk

A successful investment portfolio is by definition one where your mistakes aren’t big enough to damage below the waterline. We have risk ratings on all our Small Cap stocks to help you manage your risk profile.

Grow your confidence

What am I aiming for with Small Caps?

You want two or three winners, which are currently small companies (or Small Caps), but which have the capacity to become much bigger.

The flip side is that you will have two or three poor performers. The key here is that your losses are limited, but your gains are not.

 

With smaller positions you can start to build up as your confidence in a stock grows.

New industries

Build up exposure to newer industries, and emerging business models. From our Dashboard you can see each sector and our favourite stocks to buy.

It’s worth pointing out that timing is difficult to perfect. In fact, impossible. Regular readers know that I like to Buy slowly, and if, like  Hansen Technologies (HSN)  the stock moves quite fast, we may not want to chase the price.

 Under the Radar Report Portfolio Manager.

50% of our Small Caps pay dividends. In a portfolio context, dividends help to pay fees, taxes and provide a tangible return on your money. Stocks that don’t pay a dividend, are 100% growth investments. This is not a bad thing, but there is more risk.

If a big % of your portfolio is in a small cap, it is often best to take some profits early. It is always best to anticipate news, rather than react to it. This is easier said than done, but if you are reacting to the news, then essentially it’s too late. The bigger your share holding the more important it is to anticipate news.

Holding shares for a year may make the most sense, because your capital gains tax exposure will be reduced. Please seek independent tax advice.