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Edward Sheldon has been reviewing his investment portfolio over the last week. Here are his top five stock holdings as we start 2022.
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Edward Sheldon, CFA
Based in London, Edward is a freelance investment analyst/writer who has clients all across the world. Before launching his own investment content business in 2017, he spent 15 years working in private wealth management and institutional asset management in the UK and Australia.
Edward is a passionate investor himself and manages his own global stock portfolio. His stock-picking strategy combines ‘growth’, ‘quality’, and ‘thematic’ approaches.
Edward holds a Commerce degree from the University of Melbourne, as well as the Investment Management Certificate (IMC) and the Chartered Financial Analyst (CFA) qualification. You can find him on Twitter @EdwardSheldon7
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The content of this article was relevant at the time of publishing. Circ*mstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.
At the start of every year, I always spend some time reviewing my investment portfolio. I do this to ensure it’s still aligned with my financial goals and risk tolerance.
In this article, I’m going to provide readers with some insights into my portfolio. Here’s a look at my five largest stock holdings as we start 2022.
Alphabet
My largest is Alphabet, the owner of Google and YouTube. The reason this is my biggest holding is that I see considerable long-term growth potential here. Not only is growth likely to come from digital advertising and cloud computing, but it’s also likely to come from new technologies, such as artificial intelligence and autonomous vehicles.
Alphabet shares had a great run in 2021, rising more than 60%, so they don’t offer the value they did a year ago. Yet the forward-looking P/E ratio is still only about 26, which I think is quite reasonable. So I’m happy to keep this as my main holding.
Apple
My second largest holding is Apple, the maker of the iPhone. Apple is a massive company these days. Currently, its market-cap is around $3trn. But this doesn’t put me off. I think this company still has plenty of growth left in the tank.
One area I’m particularly excited about here is healthcare. Apple has made some great moves in this space in recent years with its watch, which offers users a whole lot of health measurements. Yet I think Apple is only scratching the surface here in terms of the potential.
Amazon
Coming in at third place in my portfolio is Amazon. It’s the largest e-commerce company in the world and also the largest player in cloud computing.
It’s the cloud division I’m most excited about here. This industry is set to grow by nearly 20% per year over the next decade and Amazon currently has a 40%+ market share. So I expect the company to get much bigger.
Diageo
My fourth largest holding is Diageo. It owns a number of top spirits brands including Smirnoff and Tanqueray. I like having DGE as part of my top five holdings because it’s a bit more ‘defensive’ than some of my other largest holdings. When the market is volatile, DGE tends to hold up pretty well, due to the nature of the business.
However, it still has plenty of growth potential. In the years ahead, Diageo looks set to benefit from the rise in wealth across the emerging markets.
Microsoft
Finally, my fifth largest holding is Microsoft, a technology company that’s active in a number of markets including cloud computing, video gaming, and remote work solutions.
Microsoft had a great run in 2021 so, like Alphabet, it doesn’t offer the value it did a year ago. However, I’m going to hold here as I believe the company is likely to get bigger in the years ahead as the world becomes more digitalised.
Risks
Of course, there’s no guarantee these stocks will do well in 2022. All face their own unique risks. Meanwhile, it’s worth noting that I have a lot of Big Tech exposure in my top five holdings. This is a risk as these stocks can, at times, be volatile.
I’m comfortable with the risks here however. Overall, I think these stocks offer an attractive risk/reward proposition for long-term investors like myself.
Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circ*mstances should be assessed. Consider taking independent financial advice.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Edward Sheldon owns Alphabet (C shares), Amazon, Apple, Diageo, and Microsoft. The Motley Fool UK has recommended Alphabet (A shares), Amazon, Apple, Diageo, and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
