The end of the year is always a good time to review stock portfolios. With that in mind, I’m going to give readers some insight into how my own portfolio is positioned right now.
Here’s a look at my five largest stock holdings heading into 2021.
Apple
My largest holding heading into 2021 is Apple. I like Apple for several reasons. Firstly, it makes amazing products. I can’t see myself not owning an iPhone any time soon!
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Secondly, I really like the ecosystem it has built up over the last decade with the iCloud. This enhances customer ‘stickiness’, giving the company a competitive advantage.
At its current valuation, Apple is probably fully-valued. However, with the company moving into new areas such as healthcare, the long-term growth potential remains significant, in my view.
Alphabet
Close behind Apple is Alphabet (NASDAQ: GOOG). This is a stock I’ve been slowly building a position in in recent years and it’s performed well for me. My last purchase was during the stock market crash in March at $1,070. Currently, it’s trading near $1,700.
There are a number of reasons I like Alphabet. Firstly, I see Google as the ‘heart’ of the internet. If you own a business these days, you pretty much have to advertise on Google to stay competitive.
Secondly, I’m also really excited about YouTube’s growth potential. In the last 15 years, this has evolved from a platform where people posted funny videos to becoming one of the most dominant forms of entertainment globally.
Alphabet currently trades on a P/E ratio of under 30. I think that’s reasonable for this tech champion. I see it as a great stock to own for the long term.
Diageo
In third place is alcoholic beverage legend Diageo. This is a stock I was buying throughout the year while its share price was depressed. Its recent price rise has boosted the value of my holding.
The reason I like DGE is that it’s a ‘sleep-well-at-night’ stock. Alcohol is relatively recession-proof. And the company is a reliable dividend payer. Diageo also has strong long-term growth prospects. In the next 10 years, 750m extra consumers will be able to afford its brands (Johnnie Walker, Smirnoff, etc).
ASOS
My fourth largest holding going into 2021 is ASOS. This is a stock that’s done very well for me. I was buying in March at 1,120p. Today, the share price is 4,500p.
At some stage in the future, I plan to take some profits here and make it a smaller holding. I’d prefer to have Microsoft, or perhaps Amazon in my top five holdings. However, I’m not ready to sell any shares yet. With the company benefiting massively from the e-commerce boom, I think the share price can go higher in the short term.
Reckitt Benckiser
Finally, my fifth largest holding going into 2021 is consumer goods champion Reckitt Benckiser. I see this as a great to stock to own in the current environment.
Firstly, it’s benefitting from the increased focus on hygiene. Secondly, like Diageo, it’s relatively recession-proof. It’s also a reliable dividend payer.
This stock isn’t going to set the world on fire. But, in the current environment, I think it can play an important ‘defensive’ role in my portfolio.
