Your ready to go, instant 6-share balanced portfolio

Whether you are just starting to build or looking to add to your current portfolio, these ideas might suit your investment needs.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Portfolio management is a key art to master for investors. While extreme diversification can handicap your best ideas and lead to lower overall returns, extreme concentration is risky as it increases your chance of experiencing a significant loss from which it can be hard to recover.

An adequate level of diversification can be achieved in a number of ways – a balanced portfolio, incorporating different investment metrics is one.

Defensive

When it comes to owning a rock solid business that can withstand all kinds of pressures, a company backed by hard assets and with a product or service which is almost impossible to avoid is the type of stock you want. Sydney Airport Holdings Ltd (ASX: SYD) fits the bill nicely. It's backed by the hard assets of an airport and associated infrastructure and it provides a service which is critical for both domestic and international travellers.

GARP

GARP stands for growth at a reasonable price. In the past Cochlear Limited (ASX: COH) has generally traded at a very high premium due to its high growth prospects and comparative advantage in implantable hearing devices. Last year the stock price took a tumble which has arguably left the stock trading on more appealing metrics.

Mid-Cap Growth

Some investors like to allocate a portion of their portfolio to smaller stocks that have the potential to provide big returns. While the small-cap sector can be 'hit-and-miss', stocks in the mid-cap sector have generally established themselves with business models which have already proven themselves. Ozforex Group Ltd (ASX: OFX) which listed last year is one such company – its business is high quality and growing at a steady clip.

Quality

When it comes to quality, it's hard to go past Woolworths Limited (ASX: WOW). The retailer's success at continually growing sales and at squeezing extra margins from its operations has elevated the company to world class status.

Value

Dick Smith Holdings Ltd (ASX: DSH) didn't receive too much love from investors when it listed via an initial public offer (IPO) last year. However, with the electronics retailer reporting a solid $25 million net profit after tax (NPAT) for the first half and reaffirming guidance for the full year of $40 million NPAT, the stock looks to be trading in value territory.

Yield

When it comes to blue-chip companies trading on high dividend yields it's hard to go past Insurance Australia Group Limited (ASX: IAG). The insurer is forecast to pay dividends totalling 35.2 cents per share in FY 2014, placing the stock on a yield of 6.3%.

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »