I’d aim for a million buying just a few cheap shares!

Is it possible to become a millionaire by owning stocks? I am that. But whether I can successfully aim for a million depends on how much I have available to invest and what I do with it.

I think we need enough money to realistically aim for that level of portfolio. It is not necessary to have upfront – I can always drip-feed in regularly over time. After all, ambitious goals like becoming a stock market millionaire are long-term projects.

But it is also important what stocks I invest in. Instead of buying dozens of different companies and hoping one or two hit the big time, I’ll keep my portfolio to just five to 10 companies.

The good and the great

Many companies do it well. If I continue to share over the course of time, I hope to see some price appreciation.

If I buy it Unilever five years ago, for example, my shares would now be worth 13% more than I paid for them and I would receive a steady stream of dividends to boot. Invest in Next during that time I will have seen the value of the portfolio increase by 37% and I also have a modest dividend income.

Both stocks have been good performers over the past five years – and I think that may be true in the future. But there is a difference between good and great.

The next 37% price increase is good, but hardly in the same ballpark ShopifyIncrease ‘s 263% at that time or 255% jump in Apple This stock price is from last 5 years.

That’s important because the overall performance of the portfolio as I spend millions will reflect how the stock is doing. If I usually invest in stocks that produce good performance, I can do well. But I can see it many returns are stronger if I only invest in large companies.

The best is the best

I would still diversify my portfolio as a way to manage risk.

But overall performance should be better if I focus on buying stocks in a few really good companies instead of a dozen good ones.

One objection might be that not many businesses are as strong as Apple. But that’s exactly the point! This is because some companies have profitable business models that investing in these companies may be beneficial to me as a shareholder.

What about finding people? I really don’t think it’s difficult to find a big business. After all, Apple hardly hid the light under the bushel five years ago.

Buy cheap stocks

But the difficult thing is to buy a big business at a low price.

by”cheap“I mean I bought the stock for less than what I thought was the long-term value. I couldn’t get the return I wanted because I wanted to make millions if I paid more, even for a good business.

That’s why I spend time identifying businesses that I think have good commercial prospects. Then, I patiently wait for an opportunity to add to my portfolio at an attractive price.