Running your portfolio isn't just about that weekly check-in... it takes more to effectively manage a productive portfolio. But, what exactly does that mean?
Our third and final playbook in the series: A Practical Guide to Value Investing. That's right. If you've been following your series, it means that you've started and built your portfolio, but now you're looking for the best ways to run it effectively. That's why our third playbook is called A Practical Guide to Value Investing: Running Your Portfolio.
Managing your portfolio well is a practice of patience and diligence, which are the qualities of any successful investor. Now that you’ve started and built your portfolio up according to your plan, you need to think about how you’re going to manage these investments, which is why we've created a third step-by-step playbook to explain:
- Stock selection, limited activity and patience
3 Important Factors in Running Your Portfolio Effectively
Isn't it too often the answer? Even in investing, consistency is key. However you plan to manage and review your portfolio, the point is to be consistent and fall into a routine that you can reflect on. We discuss this in detail in our step-by-step playbook below.
2. Stock selection, limited activity and patience
Stock Selection: Your method of choosing stocks is what will ultimately make or break your portfolio. We suggest selecting stocks based on 3 dimensions: fundamental analysis, valuation and timing.
Limited Activity: Excessive trading generates fees and taxable events, which harm your earnings and, in turn, harm the long-term returns of your portfolio. The more you trade, the more fees and taxes you’ll pay. We'll explain how to limit your activity so that you’re only making essential trades and paying the most essential fees.
Patience: Stick to your plan. If you don’t believe in your long-term vision enough to stick it through, your portfolio will suffer the consequences of your uncertainty. We suggest investing in a stock for a minimum of 3 years, preferably 5-10 years.
In the volatile world of today, you can't argue against the benefits of diversification. Take a glance at Brexit, USA's upcoming elections, or even Canada and Australia's recent commodities rout... it's clear that diversification is necessary to a strong portfolio. How do you do diversify? Grab our playbook to find out.
We should have provided you with everything you need to know to start up, build and run your portfolio… but, we have to add that investing is an ongoing endeavour that requires constant thought, which is why we're also offering you a free trial of STRIDE.