May 26, 2017

Industrials are cheap, buying SKF

It’s always surprising how many amazing companies in the north are incredibly cheap. Why might this be? This time, my video editor, who is studying engineering, found the company SKF on the Swedish Top 10 list.

Engineering is important, especially because computers are automating more and more jobs. The choice makes sense to me, so I’m buying SKF for five thousand Swiss francs.

Why so much? Because it’s 5% of my portfolio and because I buy every stock in an amount that is 5% of the overall portfolio value. This approach ensures that the portfolio is diversified and more secure than if I focused on fewer stocks.

There are investors that think diversification is stupid because it stops you from achieving high returns. That might be correct, but for me, security is more important than returns when it comes to my retirement savings. I am taking enough risks with my own business.

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