Balancing A Stock Portfolio

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Balancing A Stock Portfolio

Balancing a stock portfolio is done to increase profits and reduce risk in stock investment. A stock portfolio is the collection of stocks that a person owns. In picking stocks for a portfolio an investors seeks diversification of his investments. Diversifying a stock portfolio helps reduce investment risk and increases opportunity to hit an investment home run. Balancing a stock portfolio typically requires that investors purchase stock in several different market sectors. Buying large cap stocks, mid cap stocks, and small cap stocks is also an investment strategy used in balancing a stock portfolio. The investor goes about picking stocks as always but he purposely does not buy stocks in the same industry. It is possible to use a portfolio management service but investors or traders balancing a stock portfolio should know how to do their own fundamental and technical analysis. Scouting out stocks in crisis and buying at the bottom of the price curve is a viable strategy. Using Candlestick analysis to anticipate market trends and market reversal is integral to managing and balancing a stock portfolio.
In balancing a stock portfolio the investor will decide first upon his investment goals. Long term investing will require a different approach from short term investing. Older investors typically pick stocks with less risk but also lower reward potential. Younger investors commonly invest in stocks with more growth potential but which often are more risky. One approach to diversifying a stock portfolio is to balance risk. One or two stocks in a portfolio may be risky growth stocks while others will be dividend stocks which offer low growth potential but long term security. Microsoft in its younger years was a growth stock. Today it offers security and a dividend but little opportunity for the exponential growth of two decades past.

Investing in stocks in several market sectors is a common approach to balancing a stock portfolio. By not putting all eggs in one basket, or market sector in this case, the investor will not be hurt by economic events the affect the whole sector. By purchasing stocks in more than one sector the investor increases his chances for picking a big winner. However, it is not the mere act of picking more than one stock that makes balancing a stock portfolio successful. Use of both fundamental analysis and technical analysis with Candlestick pattern formations allows the investor to search for stocks that have the potential for near term rapid growth as well as long term stability. In balancing a stock portfolio the investor can choose different strategies for each of his stock picks. He can invest in high tech in bio technology, banking to take advantage of a growing economy, or big oil companies if he believes that prices will rise.

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Balancing A Stock Portfolio

  1. 1. Balancing a Stock Portfolio Bywww.CandlestickForums.com
  2. 2. Balancing a stock portfoliois done to increase profits and reduce risk in stock investment. www.CandlestickForums.com
  3. 3. A stock portfolio is thecollection of stocks that a person owns. www.CandlestickForums.com
  4. 4. Inpicking stocks for a portfolio an investorsseeks diversification of his investments. www.CandlestickForums.com
  5. 5. Diversifying a stock portfolio helps reduce investment risk andincreases opportunity to hit an investment home run. www.CandlestickForums.com
  6. 6. Balancing a stock portfolio typically requires thatinvestors purchase stock in several different market sectors. www.CandlestickForums.com
  7. 7. Buyinglarge cap stocks, mid cap stocks, and small cap stocks is also an investmentstrategy used in balancing a stock portfolio. www.CandlestickForums.com
  8. 8. The investor goes about picking stocks as always but he purposely doesnot buy stocks in the same industry. www.CandlestickForums.com
  9. 9. It is possible to use a portfolio management service butinvestors or traders balancinga stock portfolio should know how to do their own fundamental and technical analysis. www.CandlestickForums.com
  10. 10. Scouting out stocks in crisis and buying at the bottom of the price curve is a viable strategy. www.CandlestickForums.com
  11. 11. Using Candlestick analysis to anticipate markettrends and market reversal is integral to managing and balancing a stock portfolio. www.CandlestickForums.com
  12. 12. In balancing a stockportfolio the investor will decide first upon his investment goals. www.CandlestickForums.com
  13. 13. Long term investing will require a differentapproach from short term investing. www.CandlestickForums.com
  14. 14. Older investors typicallypick stocks with less risk but also lower reward potential. www.CandlestickForums.com
  15. 15. Younger investorscommonly invest in stocks with more growthpotential but which often are more risky. www.CandlestickForums.com
  16. 16. One approach to diversifying a stockportfolio is to balance risk. www.CandlestickForums.com
  17. 17. One or two stocks in aportfolio may be risky growth stocks while others will be dividend stocks which offer low growth potential but long term security. www.CandlestickForums.com
  18. 18. Microsoft in its younger years was a growth stock. Today itoffers security and a dividendbut little opportunity for the exponential growth of two decades past. www.CandlestickForums.com
  19. 19. Investing in stocks inseveral market sectors is a common approach tobalancing a stock portfolio. www.CandlestickForums.com
  20. 20. By not putting all eggs in one basket, or market sector in this case, theinvestor will not be hurt byeconomic events the affect the whole sector. www.CandlestickForums.com
  21. 21. By purchasing stocks inmore than one sector the investor increases hischances for picking a big winner. www.CandlestickForums.com
  22. 22. However, it is not the mere act of picking more than one stock that makesbalancing a stock portfolio successful. www.CandlestickForums.com
  23. 23. Use of both fundamental analysis and technicalanalysis with Candlestick patternformations allows the investor to search for stocks that have the potential for near term rapid growth as well as long term stability. www.CandlestickForums.com
  24. 24. In balancing a stock portfolio the investor canchoose different strategiesfor each of his stock picks. www.CandlestickForums.com
  25. 25. He can invest in high tech in bio technology, banking to take advantage of a growing economy, or big oilcompanies if he believes that prices will rise. www.CandlestickForums.com
  26. 26. He should limit the number of stocks in hisportfolio to the numberthat he can comfortablyfollow with Candlestick charting techniques www.CandlestickForums.com
  27. 27. in order not to buy a stock for which market sentiment promptly changes. www.CandlestickForums.com
  28. 28. Balancing a portfolio is never an excuse for notwatching the performance of each and every stock that one owns. www.CandlestickForums.com

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