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BASICS FOR AN EQUITY PORTFOLIO MANAGEMENT
1. As you're aware, every equity investor has his own unique style of creating and managing his stock portfolio, which is difficult to explain, analyze and share the nuances with peer imvestors. 2. Having said that, the basics for a DIY portfolio management remain sacrosanct, which are:- a) Ensure whether you are an investor or a trader before creation. b) Decide your strategy for value investing and growth investing. c) Do your homework by keeping track of market caps, trading volumes, price data, company developments, financial data, balance sheet, basic calculations and interpreting market signals. d)) Diversify your portfolio and stay invested. e) Monitor and review monthly, even if long-term, for re-balancing. f) Create your own set of rules, but don't expect risk-free returns. g) Keep some cash available for unannounced opportunities. 3. As stock investing is not buy and forget, exit a stock when:- a) There is a change in the fundamentals which made you buy it. b) The price shoots up dramatically or drops below a threshold. c) There are better opportunities than your under-performing stock. d) There are personal reasons like re-balancing or goal fulfillment. 4. In case the above basics seem difficult and uncomfortable to perform, it is better to allow good fund managers to do them for you - by investing in good mutual funds.
2. Having said that, the basics for a DIY portfolio management remain sacrosanct, which are:-
a) Ensure whether you are an investor or a trader before creation.
b) Decide your strategy for value investing and growth investing.
c) Do your homework by keeping track of market caps, trading volumes, price data, company developments, financial data, balance sheet, basic calculations and interpreting market signals.
d)) Diversify your portfolio and stay invested.
e) Monitor and review monthly, even if long-term, for re-balancing.
f) Create your own set of rules, but don't expect risk-free returns.
g) Keep some cash available for unannounced opportunities.
3. As stock investing is not buy and forget, exit a stock when:-
a) There is a change in the fundamentals which made you buy it.
b) The price shoots up dramatically or drops below a threshold.
c) There are better opportunities than your under-performing stock.
d) There are personal reasons like re-balancing or goal fulfillment.
4. In case the above basics seem difficult and uncomfortable to perform, it is better to allow good fund managers to do them for you - by investing in good mutual funds.