Topic: How To Invest

What is Pat’s commentary for the week of May 14, 2024

Article Excerpt

A long-time Inner Circle member recently wrote, “Hello, Pat. In one of your Inner Circle letters a while back you stated, ‘We think most investors should hold up to 20% of their stock portfolios in Consumer stocks. Manufacturers of consumer staples such as food and beverages would be a sound addition to the Consumer component.’ This prompts me to ask, why 20%?” A: Spreading your stock investments across the five main economic sectors is one of the main keys to successful investing. By doing so, you avoid overloading yourself with stocks that are about to slump simply because of industry conditions or changes in investor fashion. By diversifying across the sectors, you also increase your chances of stumbling upon a market superstar—a stock that does two to three or more times better than the market average. These stocks come along every year. By nature, their appearance is unpredictable; if you could routinely spot them ahead of time, you’d quickly acquire a large…