Building a Stock Portfolio That Will Make Money
By Andrew Stratton Submitted On October 29, 2015
Investing is never a sure thing. It is easy to lose your life savings by playing the market. Prices change in a moment's notice. Its volatility is enough to make anyone understandably nervous about putting in their money. However, building a diverse stock portfolio can give you more stability and help you secure a future for your retirement.
The Main Rules
If you are new to the market game, it is important to understand some rules. The first is for you to keep about 20 percent of your investment as cash. You don't want all of your funds tied up in bonds. Should there be a financial failure, you won't lose absolutely everything. You'll have some funds to fall back on. In addition, you will be able to make some short-term investments for some quick gains should the opportunity arise.
You want a diverse stock portfolio for long-term investing, as that will help you survive the difficulties of the market. Don't invest heavily in one type of company without exploring other options. For example, while technology is a growing industry, you don't want all your money in different technology firms. There could be a downturn in the industry in which you lose everything. Choose areas that are solid and maybe put a little money in some not so good areas that are showing potential.
While you want several areas within your stock portfolio, you don't want to spread yourself too thin. You shouldn't have more than 15 or 20 to keep track of. This will help you easily manage the options you have without issue. If you have too many options, you will not have time to track and research your investment. Without the time to care for your money, you won't know when to sell in order to make more.
Buy Low and Research Extensively
Make sure you invest in options that are not fully priced but still have great earning potential. If you know the stock is good and has the ability to come back up, you should buy some when it is low. That way when the option gains its momentum back, you will make good money on the return.
Before you buy anything, you have to do your homework. Having a solid analysis of the business you want to invest in will help you know if it is worth the risk. Long-term options will stay with your stock portfolio for 10 years or more. If you plan to do some short-term or quick trading, then you can do that. You still need to have some sort of research and understanding of the companies before you invest.
There is some debate on whether or not it is a good idea to have both long-term and short-term options in your charge. Some analysts believe the two should be kept separate while others think that it helps to break up your portfolio even better.
There is some debate on whether or not it is a good idea to have both long-term and short-term options in your charge. Some analysts believe the two should be kept separate while others think that it helps to break up your portfolio even better.
Those who are new to the market will do best by researching and consulting a brokerage firm. With their expertise, you can grow your money without as much worry about not knowing what you are doing.
If you need assistance with your stock portfolio, turn to MKG Financial Group, Inc.. Learn more about our services athttp://www.mkgfinancial.com/stock-portfolio/.
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