For each model stock portfolio that is created by Lady Luck, there are thousands that are designed using a valid and well thought-out investment strategy.
What is taught about the Model Stock Portfolio?
Financial Portfolio Management training all over the world stresses adopting a market game strategy that fits the investor’s:
- Personality (Who are you? What do you like? Do you take risks?)
- Goals (What you want to achieve with this money?)
- Amount of investment capital (How much money do you have?)
- Comfort zone (How much are you willing to lose before calling it quits)
What are some of the different strategies?
Those who are attracted to the excitement of frequent trades and a win/lose scorecard might prefer to learn to trade stocks on a constant (or “day trading”) basis.
Others, with long-term goals and objectives, will be more comfortable with a “buy and hold” strategy.
Some tips to help you build a Model Stock Portfolio
Regardless of your method of playing the stock market game, these factors contribute to the creation of all strong portfolios.
- Diversification: To successfully play stock market games, diversify your portfolio with different investments from a variety of industries.
- Keep your eyes on the profit prize: Whether looking for short-term gains or long-term growth, profits are king.
- Evaluate key ratios: Learn the most important numbers (book value, return on equity (ROE), earnings per share (EPS), and net income) of all your portfolio assets.
- Be true to your investment strategy: This is your roadmap or game plan. This will guide you through the investment process. Follow it faithfully or change it.
- Minimize mistakes and risks: Much like the sports team coach that plays not to lose to keep his/her team in the game, you should avoid errors and undue risk at all costs.