Creating and maintaining your own Stock Portfolio
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The basic purpose of creating and maintaining your own stock portfolio is to maximize your gains, minimize cost and reducing risk. One of the most common mistakes investors make is losing track of their stock investments. If you hold more than three stocks then it is essential for you to track your stocks with a portfolio. Many of the investors does not want to take the headache of buiding a portfolio. That is the reason why most of them decide to pay excessive fees to their stock brokers or portfolio managers for the peace of mind and hoping that their money is in safe hands. In reality what happens, many of the manages cannot take a decision for any individual investor under them for timely implementing the entry exit rules. For any investor it is very important to enter the market at the right time and take profit occassionally. If you are so serious in investing you have to spend little more time to plan and manage your investments. Building your stock portfolio which meets your investment objectives will substatially build your wealth over a period of time. Simultaneously you can save money in commission and fee, have peace of mind, total control over your investment and gain real sense of satisfaction.
How can you do this and meeting your investment goals?
The First Step: You don’t require huge amount of money and time to start building up a stock portfolio. Your first step is to decide your investment objectives. Like any investor, your primary goal may be to grow the value of your stock portfolio, but be cautious that capital appreciation prospects are usually risky and highly volatile in nature. Another thing is portfolio balancing technique where you want to grow your capital but without undue risk. A very low risk category is there where you can gain reasonable returns and preserve your existing capital. Design your portfolio keeping your objectives and tolerance level of your risk in mind.
Few years ago it was the only way to create and maintain a stock portfolio was spreadsheets on a computer, but today stock portfolio can be created at several finance website programs Zacks, MSN Money, Yahoo! Finance and Quicken have very user-friendly programs to create a stock portfolio. Personal finance websites allow you to track your stocks on daily, weekly, monthly, quarterly, half yearly or yearly basis. Thus you will be able to assess your stock portfolio over a long period of time, which will allow you to make more informed decisions. Most of the financial websites with hyperlinks attached to the ticker symbols throgh which you can access the company profile, announcements, results, news, quotes and other relevant information about the stock or company. Buy/sell details can be entered or updated and you can see your networth, profit/loss details.
Personal finance websites allow you to organise your stocks in any fashion which suites you. If you prefer your ticker symbol to be in alphabetic order, you can do that. If you wish you hold a large portfolio you can create categories to manage it.
Buy the Right Stocks: There are thousands of different stocks from various sectors and many technical and fundamental analysis and broking housesre commending them. It is very difficult to take a decision for selecting suitable stocks. If you decide to select only value stocks, it is very hard to find out which is the right stock with underlain real value. Valueing a stock requires both technical and fundamental knowledge and analytical skills and it is the only way to assess the value od a company. Read company profile and their balance sheet and learn the basics of technical analysis which can help you to overcome this to some extent.
Diversyfying your portfolio: The main aim of diversifying a stock portfolio is to lower the volatility and risk of your portfolio. A non-diversified portfolio is a risky one. A diversified portfolio should span across different sectors, industries and asset classes including commodities, real estate etc. Non diversified portfolio means investing your whole money in one or two stocks. A market crash can take out most of your profit and part of the capital if it is non-diversified.
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