Building a High-Return, Low-Risk Stock Portfolio: Selecting the First Five Stocks

Assume you want to build a portfolio of stocks. The more stocks you add to your portfolio the more of your risk is diversified away. As a matter of fact, you need at least 25 stocks to diversify nearly all of the risk away from your portfolio. However, for this discussion post, assume you want to build a portfolio of stocks and you want to maximize your return while minimizing your risk. What will be the first five stocks you will choose. For each stock, comment on its growth potential and on its risk potential. Also, list each of the stock’s price-earnings ratios. This you can find by going into Yahoo and then looking in the Finance tab. Then put in the stock’s symbol and hit enter and then all of the stock’s valuable information will come up. Look for the price-earnings ratio. From there you can click on Analysis. You can find all kinds of financial measures, including the EPS and you can get an idea of the stock’s growth potential.

This post needs to be 6-8 paragraphs in length. I am hoping that at least one of you will find a real winner for my own portfolio.

As always, there is no right or wrong answer to this question. Just your post must be well thought out and rational and written very clearly.

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