How to Build a Portfolio?
Who wouldn’t like to have a profitable share portfolio? However, it is easier said than done, so don’t get taken in by the “get-rich quickly schemes” that have sprung up all over the place, which guarantee a profitable portfolio within hours! You have to factor in your long-term goals and objectives before building a successful portfolio.
Basically, there are three routes to take:
Long Term Blue Chip Investment
You buy shares based on your own intuitions and calculations at a price that you get to decide. This is put away in a similar fashion as an investment property. Over time they yield better returns.
Short Term Speculative Stock
Penny Stock, Futures, Short Trading, Options and several other Speculative stocks is purchased. These are quite risky, but if the right guidance and advice is provided, they can be extremely lucrative and profitable.
Combining the Two
When you join the two options mentioned above, you depend on the growth of Blue Chip stocks and make decent short term profits on your other stocks. The way your portfolio is built and the time to be spent monitoring it depends on the level of risk you are willing to take. Although outside advice is required at times, it is up to you to take some time judgment calls. Online trading needs a lot of time and patience as it is not a miracle that can happen overnight. When it comes to Blue Chip stocks, you have to aim for capital growth. For other shares, they can show capital growth to a certain degree if held for long enough, but they are apt for short-term purposes for quick profit/loss and fast turnaround.
State of Personal Finances
Before you can venture into the market, you have to survey the condition of your personal finances since the funds at your disposal will dictate what kind of stocks you can purchase. If you decide to buy Old Stocks or Blue Chips, be prepared that they are very costly, so you need to have solid cash to buy them and build up a portfolio. Another alternative is to buy such shares in the smallest quantities they are sold in and gradually strengthen your portfolio. However, this process is tedious and time-consuming. If you wish to build a portfolio faster, then Speculative stocks are the best option for you. This calculator will give you an idea about the yield of your portfolio for a certain period of time.
Watch your stocks closely by keeping tabs on your portfolio, since market and industry trends change every second – you have to be updated with all the necessary information.