We are delighted to share this special real money portfolio with all fools around the world. As we shared in our announcement on April 1, we think this is a good time to make long-term investments in the stock market. And that’s exactly what this unique portfolio is: a collection of our foolproof stocks with great conviction designed to make money in the long run.
With the expansion of this portfolio, we are using the collective thinking of our Premium Investment Team to select some of our companies with the greatest conviction. But readers will not be the only ones owning these companies, because as part of this offering, The Motley Fool is investing $ 50,000 of our own capital in this portfolio. We will therefore have a skin in the game to own these shares, which we believe has the potential to deliver positive returns over five years (and ideally also to defeat the market).
In addition, we have also identified a handful of low-cost exchange traded funds (ETFs) that will provide wider market exposure, and work an important diversifying role with our stock recommendations.
We put together our April Fool portfolio with a view to diversification, while still being able to play an important role in most compelling ideas. We think to own at least 15 stocks is an important part of successful investing, and that’s what we’re doing here. And by adding the ETFs, we believe we will build a diversified, foolish portfolio with great potential to make money over the next five years.
All in all, this is a fundamental portfolio that represents some of our most compelling and exciting recommendations. And we want everyone next to us to invest!
So let’s get started, start with our award plan.
Award plan
Over the next few weeks, we will be recommending 15 stocks and five ETFs for a diversified portfolio that we believe is very well set up to make money for the next five years:
- Shares (15): 75% of our portfolio (5% for each share)
- ETFs (5): 20% of our portfolio (4% for each ETF)
- Cash: 5% cash reserved
This particular investment collection is designed to play a growth-oriented stock role, so if you are a more conservative investor, you may want to consider owning additional safety assets such as cash or bonds elsewhere in your portfolio. In fact, you will see that we also advocate at least a 5% cash position in the portfolio to balance the expected volatility of our companies, as well as to hold extra funds to invest further.
Lastly, remember to consider this portfolio in the context of all your assets and your total asset allocation.
Now we go over the first five investments we make and go buy for our special April Fool portfolio:
Vanguard Total Stock Market ETF
Portfolio weight: 4%
Vanguard Total Stock Market ETF (NYSEMKT: VTI) is a broad-exchange traded fund that offers wide exposure to the local stock market. Although the primary focus will be on larger equities, middle and small capital equities are also represented here. This fund is supposed to be an anchor for the April Fool’s portfolio, given the far-reaching focus on domestic equity asset classes.
With an expense ratio of only 0.03%, this ETF is a low-cost tool to capture exposure in the broader stock market. This fund, like all our ETF recommendations, is designed to be a complement to the individual stock exchange elsewhere in this portfolio.
Vanguard Total International Stock Market ETF
Portfolio weight: 4%
Vanguard Total International Stock Market ETF (NASDAQ: VXUS) offers a one-stop shop for international investments. While the fund leans heavier in the large developed market space, it also provides exposure to emerging markets, accounting for about a quarter of the shares in the ETF.
VXUS has a reasonable price of 0.08%, so you do not lose money on unnecessary fees. We recommend that all investors have at least direct exposure to overseas companies; this fund fulfills the role nicely on a broad level, while also leaving room for more targeted exposure elsewhere in the portfolio.
Amazon.com
Portfolio weight: 5%
Amazon.com (NASDAQ: AMZN) is consistently one of our businesses with the best conviction within the Fool analyst team (even with the planned change in leadership role for founder Jeff Bezos). The company has become a growing part of so many of our lives, especially during the pandemic year 2020. Amazon is a giant $ 1.6 billion in market capitalization, but the company remains nimble and innovative in its businesses, including the businesses to which it lead. (such as e-commerce and Amazon Web Services) and those in which it takes up a larger share of the pie (such as online advertising, a market where it is now reportedly the third largest).
At almost $ 3,300 per share, Amazon is an expensive price. So if you have access to partial shares, you can allocate closer to an amount you can afford (we will buy $ 2,500 in our own real money portfolio). But do not let the share price or market capitalization scare you. We believe that Amazon still has a lot of money ahead of it, even as Bezos hands over the reins to Andy Jassy, the talented current CEO of AWS.
Etsy
Portfolio weight: 5%
Etsy (NASDAQ: ETSY) according to CEO Josh Silverman, 2020 is a ‘transforming’ year, and there’s no surprise: revenue and gross trading value sold on Etsy platforms have more than doubled to the levels the company originally wanted . 2023. In fact, it grew 2.5 times as fast as e-commerce in 2020 in general.
There are now more than 85 million items on the market for handmade goods for sale, and Etsy is declining slightly from sales (which increased nicely during the year). And Etsy is doing a great job of keeping more of its buyers around. The number of customers making six or more purchases per year increased by a whopping 157% in 2020. And while the increase in the purchase of handmade masks to curb the spread of Covid helped growth in 2020, the impact decreased during the year (now only 4)% of trade sales compared to 11% earlier in 2020) .
With a solid balance sheet, high margins and increasing returns on capital, Etsy looks set to be a winner well beyond 2020.
Portfolio weight: 5%
During a very stressful 2020, there was at least one place online that visited hundreds of millions of users to be inspired, encouraged and entertained: Pinterest (NYSE: PINS). With nearly 460 million monthly active users (including 100 million who joined last year), Pinterest is one of the largest social media platforms, providing a positive atmosphere for users to go from inspiration to reality. There are now 50% more “boards” – places on the site where users store and store (“pin”) the content they like than a year ago.
Along with the increasing number of users comes a growing business that is really still finding its position. Revenue rose 76% in the last quarter as artificial intelligence and new advertising tools helped advertising clients spend more efficiently. The company’s average revenue per user rose 29% in the fourth quarter, but remains lower than other social media advertising platforms Facebook. So there is plenty of room for improvement and expansion, especially as Pinterest continues to increase its more direct shopping malls.
We like CEO and co-founder Ben Silbermann, who left Google to start Pinterest, owns more than $ 3 billion worth of shares (just like his co-founder Paul Sciarra). While the stock will undoubtedly have its ups and downs (probably more than the average stock), we think Pinterest’s platform, its positivity, its market opportunities and its improved business model are all good things to put in a portfolio. .
Find more recommendations
We will partially fund the April Fool’s portfolio each week as we announce the underlying investments, so if you follow along (and we certainly hope you are!), You can expect to be fully invested by the end of April or the beginning. of May.
Remember that this is a long-term portfolio, and that there is probably an up and down path, so try not to pay too much attention to the daily mark. Instead, focus on the big picture – trying to build wealth over time.
Check back next week on Friday 16th April for our next update and a new round of foolish investments!