When we buy a stock and consistently buying it and managing it is generally called as stock management. Similarly when we buy multiple stocks and managing it is generally termed as Portfolio Management. As warren buffet said "Never keep all your eggs in single basket", it is better to have a portfolio of 8 to 10 stocks in different sector and manage it to have greater returns. This will also avoid burning our fingers in time of disaster in any sector
 |
Portfolio Management |
- Generate Ideas
- Employ Multiple sources of Return
- Simulate Outcomes
- Size Exposures
- Monitor Opportunities
Having a clear idea on what stocks to be chosen in our portfolio will bring good returns. The stocks picking depends on individuals comfort zone. Never chose a stock whose business is not familiar
It is also very important to chose stocks from multiple sectors to build a portfolio. This will balance our risks and returns. This will also help in beating the inflation
The size of stock in the portfolio is very important. It is definitely not a wise idea to have 60% of the money invested in 1 stock and remaining 40% invested in 5 stocks. This will definitely not bring a quality portfolio management process
Portfolio management in taking a stock from below different sectors can diversify your investment strategy and help in gaining great returns and beat inflation
- Banking
- Information Technology
- Pharma
- Auto
- Electrical
- Chemical Industries
- Oil
- Insurance
- NBFC
Above are few of the sector classification. One can consider picking a stock from each of the above sector and segregate their capital by investing 10% in every stock and have 10% cash as buffer to use it when identified a great opportunity during the course of portfolio management or use it during the crisis.
Strong Disclaimer: This blog is not an investing recommendation. This blog is for an educational purpose. Consult your financial advisor before investing / trading.
Have a Great Day
B G Nareshkumar
B G Nareshkumar
No comments:
Post a Comment