Investment tip #1: Spread your risk
When building your investment
portfolio, it’s vital to spread your risk across different sectors and industries. For example, don’t hold ten different bank and financial stocks. You’re too dependent on the performance of one sector.
All sectors perform differently and go through different cycles.
For instance, following the dot.com bubble bursting, technology stocks performed terribly, but mining stocks excelled. Now the opposite is true as technology stocks are doing very well and mining stocks are struggling.
Investment tip #2: Keep your investment costs low
Try to keep your investment costs as low as you can. This means shopping around for the best deal you can find with a stock broker. And don’t overtrade.
By constantly buying and selling shares, you’ll spend a lot of money on costs.
Take your time buying shares, carefully selecting your picks.
Investment tip #3: Take time to rebalance your portfolio
You should do this periodically to ensure your portfolio doesn’t become too dependent on one or two shares.
For example, if a couple of your stocks do amazingly well in comparison to the rest of your stocks, it can make the performance of your portfolio rely on these stocks too much.
You could think about selling out some of your holdings to reduce your exposure or run tight trailing stop losses so you sell as soon as there is any sign of a down turn.
Investment tip #4: Don’t obsess about your portfolio’s performance
It goes without saying that you’ll want to check how your portfolio is performing, but don’t pay close attention to daily ups and downs. This can lead you to make impulsive decisions about selling out.
Instead have a solid exit strategy in place so your emotions don’t rule your decisions. You could think about running trailing stop losses for instance.
So there you have it. Four tips to help you build a top performing investment portfolio.
*********** New release ************
This month, we’ve decided to try something new
We spend a lot of time and an extraordinary amount of money creating our advertising.
But what we’ve come to realise is that perhaps rather than ‘tell’ you how good our work is, in long advertisements, it might make more sense to just ‘show’ you instead.
That’s why we have decided to host an FSP Invest ‘Open House’
This means that for a full 30 days we want you to sample almost all of our most popular research advisory services… Absolutely risk free.
Does this sound like something that might interest you?
Then act fast… Because this offer ends at midnight on the 31st of October 2015.
Join the FSP Invest ‘Open House’ today.