Building stock portfolios is a frequently practiced exercise by the investors all around the globe. The main advantage of drafting a portfolio basket, containing stocks of various companies, is to benefit from an increase in the share price of various companies listed at the stock market, instead of gambling on one single company. Stock play is, in fact, can be understood as a close analogy to wagering.
Hence, considering it as a wager, stock portfolios are merely a practice of combating with the risk involved. The portfolio basket contains shares of various companies, selected carefully after an analysis of the market, working on the idea that if the price of one stock falls, the loss can be compensated with an increase in price from the stock of other companies. Thereof, acting as hegemony against the potential risk associated with equity investments.
This is the third and the last article in the series on building a profitable stock portfolio. The first two articles of the series detailed about the designing and investment phase. This article will provide insights to the investors on how they can maintain their portfolio basket to enjoy long term gains. Below is a three step guide for the investors on marinating a profitable stock portfolio.
Step 1: Be Patient with the Long Term Prospects of Your Stock
Before pledging in stock investments, make sure to remember that stocks ask for long term commitment. When you have formally decided to make investment of this type, allow your stock to evolve for at least a year. With an initial loss in the value, do not start to sell your shares in hustle. Let your stock settle and grow for over a year. It is only then it will bring profit margins. Once you have made investments, put a full stop to the thoughts of withdrawing the money on losses and spending it somewhere else. Stability in your investment process will be guaranteed only after following the aforementioned thought.