Asset Allocation, Part 2: Mid-Tier Stocks
Slightly more upside, slightly higher risk
This is the second post in a series on combining our recommended stocks into personal portfolios. This first post — Asset Allocation, Part 1: Core Positions — includes some background that might be useful.
Here we’ll cover the stocks that offer a little more upside potential in return for a bit more risk. But first, three quick things:
Subjective sorting. These categories (core, mid-tier, small-cap, lottery ticket) are subjective, based on a combination of market value, the risk/reward profile of the sector, and company-specific factors. Feel free to disagree over which stock belongs in what bucket and to view these lists as starting points for further research rather than strict rules.
“Financial advisor” is a credentialed job, like doctor or lawyer, and I’m just a writer and talking head. So what follows is not professional investment advice, but an example of how a reasonable person might allocate their capital if handed this newsletter’s portfolio. I currently own all the recommended stocks and options, so we’re in this together.
Physical assets come first. These commodity stocks are for after you’ve stacked plenty of gold and silver and, if possible, acquired some food-producing land or other high-quality real estate. See:
Gold or Silver? You want both, obviously, but how much of each and why?
How You Store It, Part 1: Gold In Hand Because if you can't hold it ...
Did Gold Bars Just Become An Impulse Buy?
Now For The Mid-Tiers
These are solid companies, some of which might reasonably show up in the “core” part of our portfolio. They’re all in sectors (uranium, oil/gas, copper, precious metals) with bright futures, so they have a macro wind at their backs. But they either have something left to prove or face specific issues that might cause some turbulence. This makes them slightly riskier than the core holdings but more profitable if they succeed.
How Much Of Each Stock Should You Own?
The role of these stocks in your personal portfolio depends on why you’re investing. If your main goal is wealth preservation rather than massive capital gains, a mix of core and mid-tier stocks that overweights the former would make sense. If you can tolerate some volatility in return for a chance at bigger capital gains, reverse the proportion. But remember that because the mid-tiers have some challenges to overcome, they require more attention than the core stocks, which can pretty much be left to do their thing. So set up alerts and pay attention.
The following posts introduce and/or analyze the mid-tiers:
The Only Gold Stocks You Really Need
Let’s Add Some Oil Stocks To The Portfolio
Uranium Stocks: NextGen’s “Generational” Deposit
Uranium Stocks: Denision’s Milestones
Mining Is Hard: Another Reason To Own The Royalty/Streamers
Junior Miners: SilverCrest Metals’ Free Cash Flow
Portfolio Stock Update: When Is A Gold Miner Also A Value Play?
Here’s our mid-tier list: