Monitor Stock Portfolio
The Stock Market can be a tricky subject to master, and even with years into it, investors claim no one can truly ever master the Bazaar. Even the likes of investment experts like Radhakishan S Damani and Rakesh Jhunjhunwala have been wrong and miscalculated a few deals in their portfolios. However, the amount of wealth they have generated is also a result of stock acumen. The stock market is often lucrative, and investors do grow substantial profits with a well-managed stock portfolio. In this article, we take a look at how you can monitor and manage your stock portfolio to reap benefits financially:
1) Invest Prudently
The market is full of hot air, meaning so much talk on what could work and what could flop, a lot of which is based on a rally not many people understand, but everyone wants to join! However, these words often affect market sentiment and push unnecessary action. Thus, you should never get super influenced by trends. Do your strategising and pick companies that you understand and see a scope with. Make a stock portfolio you can vouch for.
2) Know Your Risk Tolerance
Equities are volatile, and there is no guarantee of returns. It is always advisable to not invest more than what one can afford to lose and reproduce within effortless tenure.
3) Don’t Check Daily
A big mistake most investors in their nascence make is constant checking, and with apps on the phone, there are many benefits. However, this is one demerit: excess of market surveillance. This can often lead to panic! One should keep in mind that equities are always more stable and fruitful in the longer haul.
4) Check Their Reports
The one way to know how a company is doing for sure is to read its financials. You should be looking out for buzzwords like Profit After Tax (PAT), EBITDA, Earnings per Share, Dividend, Net Asset Value (NAV), ROE, ROCE, among others. Merely relying on the revenue increase would not be enough.
5) Don’t Panic
If you’re somebody who has their eyes glued on the Sensex and Nifty indices, it can get tempting to act on the urge of selling or buying. However, each action has to be met with calm strategizing. When the equity market is low, it’s easy to get pushed to sell off your stocks. Doing so, you can end up losing quality shares from your share portfolio. Later, when the prices go up, you may never be able to buy remembering how low you once had it. It’s always best to foster value.
6) Bulls chase ‘Red’
In the bull market, equities soar higher than rockets, as they lately have post-pandemic. However, remember that bulls chase “red”, meaning “losses”. If you enter into the market during the bull run, when everything is extremely expensive, there is a higher risk for when the bears trample the bulls. Too much red in the stock portfolio means your shares have been purchased at higher prices than correct. In the case of losses, if you are still convinced with your company, the strategy should be to lower the average cost by purchasing at a lower-than-existing price.
7) Bears may Bear
When the bears run over the market, it falls. All the profits nullify and this may be a particularly daring time to venture, when everything seems to be making losses. However, one should remember the market has cycles. Buying during the bear season may reap results in the bull season. This is a particularly good time to enrich your stock portfolio with cheap and value-creating organisations.
8) Not Every Dip is a Buy
The benefit of compounding which can always lower the losses is not always helpful. What this means is that in case you have purchased an equity unit at a much higher price than what it is today, you may lower its average cost if you buy more. However, that also means you would be investing more. Be mindful not to overstep your budget. You can plan your purchases as per your target price for the company.
9) Reason well
An important aspect of managing your stock portfolio is to not let your emotions get your best. Do not be too stubborn or too nervous, decide rationally on what your next move could be. Most of all, remain patient. They say the market never upsets a patient man.
10) ‘Buy and Hold’ is Oversold
With all respect to patience, some things may need a double take and even, directionally opposite approaches. If a share has been disappointing for a period that you expected growth, there may be a reason behind it. You should be vigilant on what’s happening inside the companies you have invested in. Now developments can often have severe repercussions.
1) Should my stocks portfolio have multiple sectors?
Diversification is a good strategy, however, the focus needs to be on purchasing stocks which are sure to serve your financial needs. Many investors believe less is more, but some vouch for the risk that lowers when you split the lump sum into smaller amounts.
2) How can I monitor my stock portfolio?
Start with picking shares that have a long-haul investment value as these won’t require prompt checks. However, you should make it a point to look into your portfolio once every month.
3) Are there any apps that can help with managing and monitoring share portfolios?
Yes, plenty! TradeSmart is a wise platform that can help you start and maintain your investments in a matter of simple clicks, once you register your DEMAT Account with TradeSmart. For more info, you can click here to start your investments today.