5 WAYS TO CREATE A REGULAR PROFIT-MAKING PORTFOLIO

5 WAYS TO CREATE A REGULAR PROFIT-MAKING PORTFOLIO

Back

1) Invest in 10 to 12 stocks in a year

Rotate your investment in at least 10 to 12 stocks in 1 year with average holding period of 3 to 6 months per stock.

By following this style you will be able to churn your money and that will create maximum returns on your investment.

2) Invest the same amount in each and every stock

By allocating equal amount of funds in every stock, you will be able to manage your risk effectively and cleverly.

The best way to approach this method is to invest 20% of your total investment amount in every stock and when the stocks achieve their targets, exit and re-invest that investment amount in your next stocks.

This way the investment cycle will be running and will deliver regular profits in your portfolio.

3) Maintain strict stop loss

Before you invest in any stock, define the target and stop loss for the stock. Once you have decided these figures, it is clever to stick to them come what may.

Most investors tend to continue holding on to the stocks which have breached their stop loss figures and hope that it will recover. This is the most dangerous thing to happen where you are trying to rotate your funds and create a regular profit-making portfolio.

4) Invest in good quality Mid-Cap and Small-Cap stocks

For creating a regular profit-making portfolio, it is very important to invest in Mid caps and Small caps because they are on their growth trajectory and hence they have higher stock price movement than the established large cap companies.

Historically it has been observed that the Mid caps and Small caps have always outperformed the large caps when the market is on a BULL RUN.

Now by saying that, it is wiser to go for great quality companies trading at reasonable valuations and are fundamentally sound.

5) Book profits at the first opportunity

Like in point no. 3, we suggested to maintain strict stop loss, it is equally important to maintain strict target as well.

Once the stock has achieved our target price, we suggest you book profits at this juncture and exit the stock. Booking regular profits is extremely essential for the rotation of funds in your portfolio.

I hope this essential but simple strategy will help you to create a regular profit making portfolio!

Happy Investing