# Is having about 18% of ones total investment into one company good or not so good



## 1980z28 (Mar 4, 2010)

I have purchased this company for a long time,so over the years,I have a total of 2548 of fts,I now have switch to others and have stopped the purchase of FTS

Maybe I should reduce my shares to 1000 shares

Anyone else that has a large % of investments into one company ???


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## fatcat (Nov 11, 2009)

there isn't a company on the planet that i would place 18% of my money with ...


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## Just a Guy (Mar 27, 2012)

As a buy and hold investor, I usually don't intentionally try to own too much of one company however, if it hits a home run and goes through the roof, I'm not going to sell a winner unless I see stormy skies on the horizon. 

If you had bought apple 10-15 years ago, would you be happy having sold out or kicking yourself for doing so? Note, I'm not saying buy 18% of your wealth into one company, but if it goes up 1000x or more it could easily become 18% of your holdings. 

The counter, of course, may be something like blackberry or yellowpages. 

I don't believe in selling winners to rebalance, that's just brain dead advice in my opinion.


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## AltaRed (Jun 8, 2009)

fatcat said:


> there isn't a company on the planet that i would place 18% of my money with ...


^Ditto. All other things being equal, I'd take some profits from the unwarranted runup of FTS and redeploy some of that cash elsewhere. The key issue would be cap gains if in a non-registered account. Perhaps if the OP is building his/her investment accounts with new money, that 18% weighting will eventually be worked down to 10% or less. At the very minimum, I would turn off the DRIP if that is indeed in place.


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## 1980z28 (Mar 4, 2010)

Have stop all purchases of fts at this time

I am 54 will stop working in two years or less

Will be adding another 350 k in two years when I stop working from sale of house

I put 3 k per month into the market ,so after a while the 18% will reduce itself unless FTS goes to 60 or 70$


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## dime (Jun 20, 2013)

Of course 'what best' is all relative to many different factors, like your age, net worth, risk tolerance, investing style and so on. 

But IMHO 18% is not nearly diversified enough. Much more diversification is necessary for protecting wealth. Diversify across sectors and asset classes. "Don't put all your eggs in one basket" is the age old saying. There were theories a few decades back that about 10% of the portfolio per investment was the ideal balance of growth and diversification. In recent years current theories and research seems to suggest that 3 times that amount (or even more) is necessary.


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## 1980z28 (Mar 4, 2010)

I have never in the start of buying did I think FTS would get to where it is now,It kind of creeps up

I always looked at FTS as a sure bet over the long run

At todays price it looks like 38.00 X 2548 is around is around 96k

Now that seems like a lot in one spot with div of 800.00 is safe

Will give it some serious though after new year


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## OnlyMyOpinion (Sep 1, 2013)

It sounds like the current 18% will drop to about 10% in 2 or 3 years based on 3k/mo x 24mo plus 350k of additional money. That is at the upper end of % that most might be comfortable with as a single stock within their total assets, but it might be ok depending on your other circumstances - such as having a gold-plated pension, full CPP on the horizon, etc.
In our case, where we intend to live entirely off our dividends for a number of years (pre-CPP), the highest % we have is 6.6% in TD. We have let it creep up over time and are comfortable with it and it is only 1 of 30 dividend payers we will be depending on. We started diversifying early on though. One of those (still) includes TA which is a good example of an 'old reliable' that can hit the skids. Sure glad it wasn't a large % holding.
If you choose to reduce your FTS, you presumably (unless it is in your RRSP or TSFA) face the decision of when best to sell and pay tax on your capital gains. Not sure if it would be prudent to wait two years until the year your employment income drops to ~zero? We chose to peel off a bit of RY and TRP this year when they were high to offset a few long-hold losers and neutralize the cap gains. Never a single, simple answer to this stuff is there.


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## Oldroe (Sep 18, 2009)

So are you ready to take div/income.

If so I would and do ignore %.


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## Eder (Feb 16, 2011)

My BCE is over 20% ....it just keeps going up. I doubt I will ever sell it unless the dividend is in danger. It is not a one trick pony so is actually like holding 3 or 4 separate businesses. If it drops to $40 again under threat of government interventions in the sector I will add more. I sleep pretty good at night.

Although I own over 20 different stocks I'm working on eventually trimming to under 10.


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## 1980z28 (Mar 4, 2010)

.....


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## 1980z28 (Mar 4, 2010)

Oldroe said:


> So are you ready to take div/income.
> 
> If so I would and do ignore %.


Not time for income yet


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## 1980z28 (Mar 4, 2010)

Eder said:


> My BCE is over 20% ....it just keeps going up. I doubt I will ever sell it unless the dividend is in danger. It is not a one trick pony so is actually like holding 3 or 4 separate businesses. If it drops to $40 again under threat of government interventions in the sector I will add more. I sleep pretty good at night.
> 
> Although I own over 20 different stocks I'm working on eventually trimming to under 10.


Nice to see I am not the only one

It does creep up before you notice


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## 1980z28 (Mar 4, 2010)

OnlyMyOpinion said:


> It sounds like the current 18% will drop to about 10% in 2 or 3 years based on 3k/mo x 24mo plus 350k of additional money. That is at the upper end of % that most might be comfortable with as a single stock within their total assets, but it might be ok depending on your other circumstances - such as having a gold-plated pension, full CPP on the horizon, etc.
> In our case, where we intend to live entirely off our dividends for a number of years (pre-CPP), the highest % we have is 6.6% in TD. We have let it creep up over time and are comfortable with it and it is only 1 of 30 dividend payers we will be depending on. We started diversifying early on though. One of those (still) includes TA which is a good example of an 'old reliable' that can hit the skids. Sure glad it wasn't a large % holding.
> If you choose to reduce your FTS, you presumably (unless it is in your RRSP or TSFA) face the decision of when best to sell and pay tax on your capital gains. Not sure if it would be prudent to wait two years until the year your employment income drops to ~zero? We chose to peel off a bit of RY and TRP this year when they were high to offset a few long-hold losers and neutralize the cap gains. Never a single, simple answer to this stuff is there.


semi retired 

work part time as a mechanic

no pension

only my savings

My life is very simple,I never had any debt only on first house back in the late 70`s,interest rates back than was high,I made 3.25 per hour first house was 68k

Before that I live in a homeless shelter ,maybe that is why I save all that money so I did not have to return to a shelter,was a great life lesson


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## My Own Advisor (Sep 24, 2012)

I try to keep any one stock under 10% of my total portfolio. So far, so good. 

I'd like my indexed products to be 50% or more of my portfolio, with individual stocks/securities making up the rest. Indexing only makes up about 25% now...so I'm working on indexing more.


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## 1980z28 (Mar 4, 2010)

My Own Advisor said:


> I try to keep any one stock under 10% of my total portfolio. So far, so good.
> 
> I'd like my indexed products to be 50% or more of my portfolio, with individual stocks/securities making up the rest. Indexing only makes up about 25% now...so I'm working on indexing more.


Great idea to watch what is going on and to keep cost down

Always good to be committed to improving returns in a safe manner

Are you close to retirement


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## birdman (Feb 12, 2013)

I am over 20% in RY alone and my total bank exposure is probably 50%, It just a business I know and like and I can take the risk. I also have FTS and like the stock, albeit until recently it has been a bit boring. I wouldn't worry if you like the company.


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## 1980z28 (Mar 4, 2010)

frase said:


> I am over 20% in RY alone and my total bank exposure is probably 50%, It just a business I know and like and I can take the risk. I also have FTS and like the stock, albeit until recently it has been a bit boring. I wouldn't worry if you like the company.


My bank of choice is TD so all are equally good over the year to year results plus the div.

Over 20% and rising you are a dangerous shareholder,nice to see others in a position of high 18% or more


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## My Own Advisor (Sep 24, 2012)

@1980, I figure I have about 15 years or so, unless we can really ramp up our savings rate.


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## 1980z28 (Mar 4, 2010)

My Own Advisor said:


> @1980, I figure I have about 15 years or so, unless we can really ramp up our savings rate.


It is always a battle ,plan and replan

My saving grace was a purchase of 126 acres of property about 5 years ago,so retirement is set house is 80% built and paid,no debt,pay as I go


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## Butters (Apr 20, 2012)

I think FTS is a partial exception to the percentage rule... like you said now, its probably not the greatest time to start adding more especially with your large holding... but if you trim what else would you be able to find that will give you a safer dividend that FTS? I don't think there is an answer...

I like referring to this...

http://www.theglobeandmail.com/glob...zls-model-dividend-portfolio/article15722679/

1 teleco, 1 utility, 1 bank, 1 pipeline

Teleco might have a 4th player? still reasonably buys though
Banks have some headwinds
Pipeline will nickle and dime
and everyone needs power....

you want products you gotta buy into the US



you have your utility, keep adding to the rest... if you do get unbalanced and need to add more utility, 2016 could be a good year for CU / atco


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## namelessone (Sep 28, 2012)

If the income to asset ratio is high then it's not so bad, otherwise, there's not much maneuver ability if the stock price moves drastically. 
Couple months ago, LULULEMON was a 15% position for my portfolio increased from a 2-3% position, I just exited the position this month. You can't do this if your income to asset ratio is low.


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## indexxx (Oct 31, 2011)

I've got about that much in Aapl, and I'm very comfortable with that. For now.


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## 1980z28 (Mar 4, 2010)

Year to date FTS is up 19.7%.I did not plan on it reaching the 100k mark,surprise for me

There is a couple of questions that I will be asking myself in the near future


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## My Own Advisor (Sep 24, 2012)

I the biggest holdings in my portfolio are indexed ETFs and my plan is to keep it that way, if anything, grow the passive investing portion of my portfolio over time to decrease my risk in any one security.

There are some dividend stocks I wouldn't hesitate to own for good though, FTS being one of them but I personally would be worried about FTS or any other stock comprising >10% of my portfolio. I'm risk averse though...


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## cainvest (May 1, 2013)

For someone closer to retirement I'd say 18% is a bit high. Maybe spread some of the FTS position out to other companies that you find equally attractive or a good sector ETF in that segment, if one exists.


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## 1980z28 (Mar 4, 2010)

cainvest said:


> For someone closer to retirement I'd say 18% is a bit high. Maybe spread some of the FTS position out to other companies that you find equally attractive or a good sector ETF in that segment, if one exists.


So very hard to sell or reduce,I must be attached to FTS for it is part of my family for such a long time


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## RBull (Jan 20, 2013)

I would agree with Cainvest. 

As your portfolio grows larger IMHO it's even more important to stay diversified. I've never had more than 10% in 1 stock and that wasn't for long. Other than that my limit has been 5%, although moving to ETF's since has simplified my investing significantly.


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## My Own Advisor (Sep 24, 2012)

RBull, you don't have all your investments in ETFs do you? If so, did you always invest this way to solve the diversification issue? Curious...


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## fatcat (Nov 11, 2009)

My Own Advisor said:


> There are some dividend stocks I wouldn't hesitate to own for good though, FTS being one of them but I personally would be worried about FTS or any other stock comprising >10% of my portfolio. I'm risk averse though...


+1 ... as a dividend stock FTS is excellent and reliable

but no company is immune to challenges from competition and especially from the unknown, its the black swan the bothers me with regard to any company ... i have 10% in CNR but i would go no higher than that in any company ... i am also risk averse ... for younger more aggressive investors, i can see higher percentages


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## RBull (Jan 20, 2013)

My Own Advisor said:


> RBull, you don't have all your investments in ETFs do you? If so, did you always invest this way to solve the diversification issue? Curious...


No, but yes it does help this issue.


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## cainvest (May 1, 2013)

1980z28 said:


> So very hard to sell or reduce,I must be attached to FTS for it is part of my family for such a long time


First off, I completely understand keeping the car. 

However, attachments to companies should not be viewed in the same manner IMO. Keeping a good chunk of money in one company does increase risk, a little less so if you spread it out to a sector and even less again over an broad index. While its likely all three will still suffer from a market correction, its less likely to be an impact on your portfolio if a scandal (or similar issue) were to hit the one company. While it is hard to imagine some big companies failing, it does happen from time to time. I'm definitely not saying sell off all your Fortis, just suggesting pulling the percentage back a little might be a good idea.


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## My Own Advisor (Sep 24, 2012)

RBull said:


> No, but yes it does help this issue.


Gotcha. Good to understand since I guess this is where I'm trying to take my portfolio. 

I used to be explore and core, as I get older, I'm realizing the benefits of more core (a couple ETFs) and less explore. I won't sell existing stocks though. ENB has been too good to me over the years


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## 1980z28 (Mar 4, 2010)

cainvest said:


> First off, I completely understand keeping the car.
> 
> However, attachments to companies should not be viewed in the same manner IMO. Keeping a good chunk of money in one company does increase risk, a little less so if you spread it out to a sector and even less again over an broad index. While its likely all three will still suffer from a market correction, its less likely to be an impact on your portfolio if a scandal (or similar issue) were to hit the one company. While it is hard to imagine some big companies failing, it does happen from time to time. I'm definitely not saying sell off all your Fortis, just suggesting pulling the percentage back a little might be a good idea.


Investments are about 500k

one house is 350k which I will sell in two years,put in my pocket and into a bond at that time

second house maybe 500k my retirement house(new)where I will move

I have zero debt ,have never borrow money,only first house,paid mortgage in 5 years that was back in early 80`s

My cost to live maybe 20k per year maybe less

will retire in two years at 56,I believe at that time I will not own any equities only bond and such

will take cpp at 60 just because and oas at 66,I run 10k everyday,no health issues,eat twigs and berries ,live a very simple life


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## RBull (Jan 20, 2013)

My Own Advisor said:


> Gotcha. Good to understand since I guess this is where I'm trying to take my portfolio.
> 
> I used to be explore and core, as I get older, I'm realizing the benefits of more core (a couple ETFs) and less explore. I won't sell existing stocks though. ENB has been too good to me over the years


Sent you a note. You're on a very similar track.


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## My Own Advisor (Sep 24, 2012)

Got it!


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## cainvest (May 1, 2013)

1980z28 said:


> Investments are about 500k
> one house is 350k which I will sell in two years,put in my pocket and into a bond at that time
> second house maybe 500k my retirement house(new)where I will move
> I have zero debt ,have never borrow money,only first house,paid mortgage in 5 years that was back in early 80`s
> ...


If that's your plan and you are comfortable with it, excellent! 
Just offering up my opinion, since you asked.


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## 1980z28 (Mar 4, 2010)

Please share your life knowledge with me and others,

Investors are a special type of individuals,as we wait for the rewards at the end


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## Ben1491 (Jan 13, 2012)

Tell me I am crazy. I have *ONE stock*, 100% in TFSA and 60% in RRIF!


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## My Own Advisor (Sep 24, 2012)

Ben1491 said:


> Tell me I am crazy. I have *ONE stock*, 100% in TFSA and 60% in RRIF!


If you have a bunch of money tied up in one stock, then I'll bite, yup, nuts


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## OnlyMyOpinion (Sep 1, 2013)

We assume it is also a large % of your net worth/retirement savings - but maybe not, maybe you have substantial savings outside of the one stock that is in in your TSFA and RRIF - real estate, a good DB pension, nonregistered savings, GIC's, etc.?
If not then yes, as you requested - _you are crazy_.


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## 1980z28 (Mar 4, 2010)

all eggs in one basket,not good


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## donald (Apr 18, 2011)

Obviously not a good idea but everyone has to admit FTS is pretty freaking solid if one let it grow and accumulate and it went over your intended exposure.
I would honestly feel safer having half my wealth tied into a large chunk of fts than a single family home somewhere in canada(like millions and millions of canadians)but i guess that risk profile is different because you need a place to live.(but really it is no different)


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## 1980z28 (Mar 4, 2010)

donald said:


> Obviously not a good idea but everyone has to admit FTS is pretty freaking solid if one let it grow and accumulate and it went over your intended exposure.
> I would honestly feel safer having half my wealth tied into a large chunk of fts than a single family home somewhere in canada(like millions and millions of canadians)but i guess that risk profile is different because you need a place to live.(but really it is no different)


I think FTS is about 7% of my net worth,but 18% of my investments in the market,looking at it in a overall picture,I think it would be ok


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## My Own Advisor (Sep 24, 2012)

You raise an interesting point about stocks vs. RE donald. I would prefer more of our assets in the stock market vs. a home.

For example, if someone said would you rather have $400,000 equity in CDN stocks OR $400,000 equity in my home, I would take the stocks all day long.

House "rich" and being asset poor elsewhere is not very diversified nor good IMO.


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## donald (Apr 18, 2011)

I agree with you hands down MOA
400k in a basket of stocks all day long....
House doesn't produce anything,it just sits there and not to mention costs money!!!
But,yeah ya you can't live inside a portfolio,i get that so maybe it is a wasted comparison!


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## My Own Advisor (Sep 24, 2012)

Ha. Well, yes, you have live somewhere. 

I guess a good (financial) scenario would be to have invested assets 2x or more your house/home equity assets.

Houses cost money for sure, even when they are bought and paid for.

I guess the same can be said for investments, they cost you money as well...you have capital gains (non-reg.) or deferred taxes (RRSP, RRIF) to deal with. At least the TFSA can save us all, for now, until the government changes the rules on us?


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## 1980z28 (Mar 4, 2010)

Can always leverage the house to invest,if that does not cause you stress

Nice to have no mortgage ,I think you can leverage 75% or more


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