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An example of an effective investment portfolio. How to create a long-term investment portfolio? What is direct investment?

The stock market is designed to redistribute money from active to patient

Quite a large part of traders are spoiled by other people's success stories, get-rich-quick ideas and the hope that the so-called “trading grail” will be found. In the vast majority of cases, this all leads to losing the trading deposit and receiving regular losses or even giving up trading.

And in fact, many of us simply forget about main goal existence of the stock market is investment. I've seen two main groups of opinions about investing.

  • The first opinion is that you won't make much money from investing.
  • Secondly, investing is for rich people.

It should be noted that the world knows many billionaire and multimillionaire investors, but I do not know a single one or a scalper in this weight category. To support this, I will quote one of the most prominent investors of our time, Warren Buffett: “ The stock market is designed to redistribute money from active to patient».

My point is that it is better to earn moderately and constantly than to regularly lose in the hope of exorbitant interest rates.

  • First, investing will make you wealthy over time,
  • secondly, your nervous system will remain healthy.
  • And third, if you stay in the market for a long time, you will still move to medium- or long-term trading horizons. This is the usual evolution of a trader.

How much money do you need for an investment portfolio?

Do you need a lot of money to invest? Absolutely not! To start, $50-100 will be enough. The main thing in investing is not the minimum amount, but the development of investment habits, i.e. the skill of saving money for further investment. For example, a fairly popular figure is saving 10% of all cash receipts. At all, the ability to save money for investment is half the success, no less. Thus, the growth of your investment portfolio will be additionally ensured by a constant flow of funds.

Next, let's look at the trading tools that we will use. As is clear from the title of the article, we are talking about available investment methods, so we will use the services of dealing centers, or rather their instruments - contracts for difference on shares and ETFs.

Where to start your first investment?

You need to choose the best stocks that are growing the fastest and paying the highest dividends.

Let's start with the case when we have a very small trading deposit - at the level of $50-100. In this case, we do not have many options, and we can invest in an index (exchange-traded fund), for example in SPY (an alternative could be QQQ or DIA).

SPY is an ETF that consists of stocks in the S&P 500 index in the same proportion as the index itself. Thus, by purchasing one SPY instrument, we are purchasing a portfolio of the top 500 stocks. Similarly, QQQ duplicates the NASDAQ 100 index, and the DIA fund duplicates the Dow Jones 30 index. These indices have a very high correlation with each other, so it is enough to choose one of them. The only difference is the price.

On this moment the cheapest is QQQ, its cost is $120. Therefore, if we have an initial deposit of $50-100, then the amount will cover 40-80% of the value of the asset. Are there any risks in this? Yes, there is, because in When investing, we should work only “for our own”, without leverage and margin funds - they bear all the risk in the stock market. But we are talking about a primary investment (starting investment), and for it we will still use the margin. Indices move quite slowly, and it is extremely rare for them to have a drawdown of more than 50%.

Let me remind you once again that we use leverage only when investing for the first time; over time, due to additional investments and dividends, we will be able to trade on our own. It is also advisable, even at the initial stage, not to take a position with a leverage of more than 1:2. Subsequently, in order to avoid the desire to take risks, it will be possible to set the margin size for the account 1:1, so you will not be able to trade with borrowed funds.

Which dealing center should you choose?

So, since we're getting technical, I'll talk about some important points at the choice of the dealing center. So, your DC must support CFD operations, and, of course, be reliable. For investments to be effective, it is better to open a swap-free account, because over the long term, swaps will take a fairly large part of the profit.

Another important factor– your DC must pay dividends on . At first glance, these are not large amounts, but over time, due to the effect of compound interest, income from reinvesting dividends grows progressively. The effect of dividends on the growth of the trading portfolio can be seen in the graph below.

Other indicators, for example, commissions or deposits, are not particularly important to us, since we have a long-term trading strategy, and we won’t have many deals.

How to increase the profitability of your investment portfolio?

How can you improve your portfolio composition? It's simple: you need to choose the best stocks that are growing the fastest and paying the highest dividends. And finding them is not a problem, especially since the work of finding them has already been done for us.

There is a group of companies called the Dividend Aristocrats. Dividend aristocrats are companies that have consistently increased their dividends over the past 25 years. In other words, these are companies with a fully formed and well-developed business that increase their profits year after year. Also, the basic indicator of such companies is their financial health.

Finding such companies is quite easy. Just search for “dividend aristocrats” and you will easily find this list of more than 50 companies. We don't need to use any additional screeners or filters. In words it is clear that such shares are better, but on the chart this can be seen even better:

The graph takes into account the reinvestment of dividends. It can be seen that the adjusted investment portfolio is ahead of the usual one by almost 100%, and with progression over time. In addition, I must clarify that aristocratic companies pay dividends on average 50-100% higher than the market average.

Selecting the best of the best stocks

But, of course, we won’t take 50 companies. Firstly, our deposit will not be enough for us (as we wrote above, we now have $500-1000), and secondly, in the CFD listings of a regular dealing center, as a rule, there is no complete set of shares from the group of dividend aristocrats. Although even if there are many securities we need, it is better for us to reduce our portfolio.

This can be done without losing diversification or increasing profits. To do this, we need to select a portfolio of aristocratic stocks that belong to different sectors. These companies are present in 10 sectors of the stock market, so we can select one stock from each sector, and our portfolio will consist of 10 elite securities.

But this is ideal when the DC presents a wide range of CFDs on shares. As a rule, the list of available tools is quite small, and there are even fewer aristocrats in it. I did a little analysis and selected for you the stocks that are the most common among the available instruments. These are securities represented by tickers KO, PG, WMT, MMM, JNJ, MCD, XOM and T.

How to balance your investment portfolio?

But that is not all! I'll tell you another one the secret to increasing profitability your investments. It's called internal portfolio balancing.

Internal balancing of an investment portfolio consists of constantly bringing the invested funds in each individual investment to an equal share relative to the entire portfolio. Those. if one asset has risen in price and the second has fallen in price, then we close part of the position in the first and buy the second with this money. Here's how, the example in the figure shows the usual SP500 index, and the same index, but with internal balancing. As you can see, portfolio balancing significantly increases profitability by long period time.

How often should balancing be done? I believe that once a quarter will be enough.

  • Firstly, during this time, shares can rise more or less well and fall between their average values, and there will be something to balance.
  • And secondly, balancing is trading operations, for which you need to pay a trading commission, so the more often you do it, the more expenses there will be.

Total

And at this stage we will receive profit from investments and constant replenishment of the deposit due to the investment culture (10% of revenues). At the same time, we will improve efficiency by reinvesting dividends and selecting the best stocks (dividend aristocrats), as well as through quarterly portfolio rebalancing.

In fact, there are many methods for increasing profits, the main thing is not to stop in your investment education. Work on yourself, learn from other earning investors, adopt only the best experience - this is the key to your success as an investor.

In conclusion, I want to emphasize that the sooner you start managing your portfolio, the faster you will become wealthy. Big money is made on long time intervals. As the legendary Jesse Livermore said: “Big profits are not calculated, but hatched.”

Thank you for your attention and dacha investments!

which will reliably protect your savings from inflation,
financial crises and other undesirable factors of the modern economy

What it is?

About the methodology we use

The composition of model investment portfolios and the relationships between components are selected in accordance with the principles of passive investments and Modern Portfolio Theory, developed by Harry Markowitz (USA).

In 1990, Markowitz received the Nobel Prize in Economics for his research, and his methods are used throughout the financial world. Modern theory portfolio, is based on mathematical methods that help optimize portfolio composition and performance according to your individual investment profile.

Almost no portfolio management is required (the “Buy and Forget” or “Buy and Hold” principle), which is ideal for non-professional investors.

What will be in the briefcase

The composition of the portfolio is selected according to financial goals and depends on the size of the starting capital and investment profile. To determine your investment profile, we will offer you a simple test.

As a rule, the portfolio includes: Stocks, Bonds, Real Estate, Precious Metals. All types of assets are included in the portfolio as part of widely diversified index investment funds with minimal commissions. Purchasing assets and managing a portfolio will not require any qualifications or experience from you.

After providing the portfolio, you will know: the expected return of the portfolio, risks, results of testing the portfolio on historical data (including in crisis situations) and much more...

Why do you need a briefcase?

An investment portfolio can be created for different purposes.

Here are some examples, although there are many more real-life situations:

Apartment purchase

Buying an apartment (for living) after 7 years and saving part of the investment portfolio to receive passive income

Early retirement

Create capital that will allow you to retire in 10 years and live on passive income from the investment portfolio.

Become a millionaire

Earn $1 million in 8 years by investing monthly savings from salary and other income

Portfolio types

Depending on your financial goals and conditions, we will provide you with an investment portfolio that satisfies you in terms of its indicators and composition:

Civil servant portfolio

Russian market

Civil servants in Russia are not allowed to purchase foreign securities, so the portfolio will only contain highly liquid and reliable Russian assets, denominated in rubles and foreign currencies.

Growth Portfolio

International markets

The portfolio includes assets different countries: Russia, USA, EU and developing countries. A diversified portfolio best protects capital from a large number of risks: inflation, political risks, financial crises etc. The returns of diversified portfolios usually exceed any possibilities bank deposits and bonds (in foreign currency or rubles).

Passive income portfolio

For regular withdrawal of money

If you already have capital and want to use it to generate passive income, then this portfolio is best for you. It consists only of well-protected conservative assets that generate regular income (dividends and bond coupons). The savings themselves will be safe and protected from inflation.

Why us?

We are one of the few in Russia who operate under the Fee-Only scheme.

Advisors with the Fee-Only payment scheme NEVER charge commissions or sell financial products (management companies and brokers). What is important to us is, first of all, your goals and objectives, and not partners’ commissions. Therefore, we offer only the most profitable solutions existing on the world markets.

Our company is part of the National League of Independent Investment Advisors (NL IIS) and is not a bank, broker or management company.

Who do you need a reliable financial advisor or salesperson? financial products and services?

What will you get?

Portfolio description

The main document that describes the investment portfolio. Here we talk in detail about the characteristics of the portfolio and the risks to which the assets are exposed. We present the results of testing the portfolio on historical data. We provide recommendations regarding the purchase of securities and much more...

Asset ratio

A convenient table in EXCEL format that will help you determine exactly how much you need to spend on purchasing each security included in your portfolio.

You can consult with an experienced financial advisor to find out all the details investment strategy and ask questions that interest you.

An example of the historical return of a balanced portfolio in rubles


Term
investment

By investing in the shares of one company, you risk 100% , that is, all yours investment capital completely depends on one company. In order to reduce investment risks, it is best to create an investment portfolio of shares, where even if there are losses on 2-4 securities, the remaining companies will increase your overall result into a positive return.

The content of the article:

View the composition of a balanced investment portfolio of securities:

Stock portfolio
SectorCompany
Technologies Micron Technology (MU)
Adobe Systems (ADBE)
NVIDIA Corporation (NVDA)
Facebook (FB)
Nielsen (FB)
Alphabet (GOOG)
Cisco Systems (CSCO)
Salesforce (CRM)
Services Amazon (AMZN)
Alibaba Group (BABA)
Time-Warner (TWX)
Netflix (NFLX)
Consumer goods LOreal (OR.PA)
Berry Plastics Group (BERY)
Colgate-Palmolive Company (CL)
Volkswagen AG (VOW3.DE)
Goodyear Tire and Rubber Company (GT)
Davide Campari-Milano (CPR.MI)
Carnival (CCL.L)
Beiersdorf (BEI.DE)
Healthcare Johnson & Johnson (JNJ)
Abbott Laboratories (ABT)
Thermo Fisher Scientific (TMO)
Allergan (AGN)
Cooper Cos Inc (COO)
CVS Health Corp (CVS)
Eli Lilly & Company (LLY)
Raw materials Celanese Corp (CE)
Dow Chemical Co (DOW)

The profitability of a securities portfolio largely depends on what the investor follows. You need to know not only what assets to build your stock portfolio from, but also how exactly to trade and on the basis of what factors investment decisions should be made, where the main directions of strategies are -

  1. Buy and hold (buying large and dividend-paying companies for the long term);
  2. Medium-term investments (for 2-4 months under the influence of new changes in companies);
  3. Active trading (daily purchases/sales).

How a securities portfolio is formed

The essence of any securities portfolio is risk reduction, which is achieved through diversification - distribution. In simple terms, this means not putting all your eggs in one basket.

If there are 15 companies in your portfolio and 3 of them made a loss, then the remaining securities can cover the losses. But not only the number of different shares plays an important role, but also the distribution of capital.

For example, you bought shares in ten companies, but invested 80% of the capital in one company. In this case, despite the diversity of the portfolio, your risk will be high.

It is believed that 70-80% capital should be invested in conservative and reliable companies, and only 20-30% distribute among the most promising but high-risk stocks. There cannot be clear rules here, but the point is to protect yourself as much as possible from large losses.

The conservative part of the portfolio may include not only company shares, but also bonds, Eurobonds, federal loan, shares of mutual funds (MUF).

Yes, this part of building a stock portfolio is the most boring, but the result can be an 800% return in three years.

Your portfolio should include growth or key sectors, and the strongest stocks from them.

For example, medicine cannot be ignored now. It's not just about growth, but also about the prospects for the next 20 years.

If you look at the demographics of Russia, you will see that the population is aging:


In Europe the situation is even worse. This means that there will be fewer and fewer visitors in nightclubs, but clinics will become more popular.

Poll: How many stocks are in your portfolio?

The structure of the securities portfolio consists of three types of shares:

  1. . High liquidity and huge capitalization. In addition to a solid reputation, these shares have other privileges. For example, the regulator has the right to stop trading if blue chips fall too quickly. The volatility of blue chip quotes within a trading day is characterized by moderate and leisurely movements. Examples: American Express Co. (credit services), AT&T (telecommunications), Boeing Co., The (aircraft and defense), Caterpillar, Inc. (agricultural and construction equipment), Cisco Systems (telecommunications), Chevron Corp. ( oil and gas company), Coca-Cola Co. (beverages).
  2. . Speculators do not use second-tier stocks for intraday trading. However, the securities of such issuers may have hidden potential, and low liquidity may result in a sharp and prolonged increase in the exchange rate. Examples: Raytheon Company (rocketry), Honeywell International (defense), Tesla (electric vehicles), and Supernus Pharmaceuticals (medicine).
  3. . These are industrial regional enterprises and companies, the main owners of which are municipalities or small private investors. Very low liquidity. Examples: Spetsgazremstroy, Tyumendorstroy.

If you think that creating a portfolio requires huge capital, then this is not entirely true. Of course, it won’t hurt, but you can start with the smallest, there’s more than a minimum amount for opening a brokerage account for, say, everything $200 . With this money you can already buy shares of 2-8 companies.

Here you can create a full-fledged portfolio of shares of different industries and markets, for example, European, American and Asian companies:

How to create a stock investment portfolio from scratch

You can buy one share, the next month another one, the third, the fourth - one more, and in the fifth month you can buy securities with the profit from the first four months. Your investments will begin to work for themselves and within a year you can collect a sufficient portfolio of securities.

Portfolio management

First of all, you need to pay attention to what type of profit you plan to receive: investment or speculative.

In the first case, diversification of the stock portfolio plays a huge role. The more industries are included in the investment profile, the lower the risk.

The ideal ratio is a portfolio of shares that follows all the rising trends in the general index, but ignores its decline.

In this case, it is better to allocate a larger share to high-dividend assets. In the long run interest charges redistributed profits will give the best result compared to assets without dividends. Considering the long-term nature of investments, some of the funds can be allocated to promising second-tier shares ( no more than 35%). Excess time will allow you to close any positions, regardless of their liquidity.

If speculative types of portfolios are considered, then only highly liquid assets will be the main instruments for trading. Positions must be closed almost daily, so even a small lack of liquidity can result in a loss. In addition, at a high pace of transactions, receiving dividends fades into the background and you can freely choose those blue chips that do not pay them at all.

Poll: Your portfolio is designed for the following periods:

Poll Options are limited because JavaScript is disabled in your browser.

    Long-term investments 54%, 290 votes

    I don't have it yet * 20%, 108 votes

    Medium-term investments 15%, 83 vote

    Short-term investments 5%, 27 votes

    Depending on specific shares 5%, 26 votes

* - added by visitor

Management of a securities portfolio is not limited only to assets, since capital also has a large role, namely profit management. Let's say you made a profit, what to do with it? further?

Of course, it’s nice to make a profit and spend it on yourself, but this would not be entirely correct, since it is better to divide the profit received into several parts:

  • part to reinvest
  • set aside some for a financial cushion
  • keep part as a reward

However, if you do what American pension funds do, that is, you completely reinvest your money, then when you get old you won't have anything to worry about.

For example, after working for 3-6 months at a good job in America, you will be asked to save money in Pension Fund and will provide the right to choose: bonds, shares, commodity markets, different risks... but the point is that over 20-30 years of work and these deposits, a huge capital is formed that will work for itself. Thus, pensioners from developed countries do not deny themselves anything.

Look at a simple example if you nest $1000 under 6% per month and do not withdraw profits for 3 years:


The result will be a profit of 814%.

For example, over the last 2 years the shares Amazon grew by 200% , over the last 3 years promotions Adidas grew by 300% , the stock market allows you to earn this money.

Ready-made stock portfolios

Surely you have heard about stock indices like Dow Jones or CAC 40, DAX... The basket of these indices contains the most large companies on the stock exchange, already being ready-made portfolios.

It is ETF ( exchange-traded funds) began to copy baskets of all stock indices and sell their shares. You can buy one share of an ETF fund, the assets of which will be a certain portfolio. This is very similar to a mutual fund, but here you buy shares on the stock exchange and are not dependent on anyone.

What is ETF

ETF(Exchange Traded Funds), or, in other words, exchange traded funds are investment product, which emerged at the end of the last century in North American markets and last years rapidly gaining popularity around the world.

Shares of such funds are traded on stock exchange on a par with other securities. The owner of each such share has a certain share in the total assets of the ETF, which, in turn, is represented by a certain portfolio.

By type of assets included in the ETF structure, there are:

  • Index– such a fund buys all shares from a basket of a specific stock index. This could be 30 companies, such as a basket of the DAX index, or 500 companies in the S&P 500 index. Your single share of the ETF will include a ready-made portfolio of securities.
  • Industry– focused on shares of a particular sector of the economy, for example, oil production.
  • Commodity– own futures for oil, gold, wheat, etc.
  • Bond funds.
  • Real estate funds.
  • Reverse funds– a bet is placed on a fall in the quotes of a certain market.
  • Synthetic– buy shares of other ETFs.

There are even very exotic ETFs - for example, a fund that owns shares of companies blacklisted by the Indian Ministry of Economic Affairs, or a fund that owns only shares of whiskey producing companies.

The broker provides professional trading platform And Better conditions. Minimum deposit to open an account $250 .

Conclusion

  1. You can buy shares yourself; it’s no more difficult than buying a case for your phone in an online store.
  2. You can buy shares of different companies to build your portfolio.
  3. You can also buy a share of a ready-made ETF portfolio or securities of mutual funds.

Since there is a lot of variety, buy what is closer to you, what you are more knowledgeable about or would like.

Whatever you choose, the portfolio will always protect you, and its main goal is to reduce risks, so when choosing a portfolio, take into account not only companies of the same type, but also different industries or directions.

If you find an error, please highlight a piece of text and click Ctrl+Enter.


Almost every investment contains 100% risk, which is why not only the percentage of profit is important for an investor, but also the reliability of the investment, at least the safety of funds. Even if an investment has 100% risk, investors use an ancient technique that reduces the risk to zero.

The key word here is diversification, What in simple words means "don't put all your eggs in one basket."

For modern investments, the formation of an investment portfolio is simply necessary. The stock portfolio contains different sectors, stocks were selected using the Buy and Hold strategy that Warren Buffett loves so much. Given the charts of many companies, even with a conservative strategy, individual stocks can return more than 200% per annum, with the portfolio serving as a risk control.

Investment PAMM portfolio:

Portfolio of successful PAMM accounts for the last the reporting month— February 2020
PAMM account (number) Profit Loss % Manager
Konkord stable profi (415171) 4,1% 10-20%
Kalsarikannit (416226) 9,7% 10-25%
CartMan_in_da house (427015) -1,2% 10-50%
FX_KNOWHOW (450950) 20,2% 30-45%
CELINDRJOEV V.J. (451520) 9,7% 30%
Victory_ForLuck_02 (446503) 20,1% 40-45%
Profit72 (435041) 49,3% 15-50%
Hipster (452975) 128,6% 20-35%
Suc 1.0 (433298) 15,5% 30-50%
Krat.co (449044) 33,2% 50%
AlpenGold999 (452288) 78,3% 50%
Lamprechtsofen2.0 (432236) 6,3% 20-45%
Respek_t (429024) 30,4% 15-40%
Moriarti (329842) 5,8% 20-40%
SL TP V (425470) 5,8% 0-45%

If you have not yet decided where to invest your money, then you can focus on this portfolio. I invest only in the most reliable PAMM accounts, and before investing money, I carefully analyze and weigh the pros and cons. Managers who satisfy the reliability/return ratio become part of my investment portfolio. I systematically withdraw profits, reinvest, replenish investments and add new assets.

But here on the blog I update the portfolio once a month and it is NOT a copy of my portfolio and a reason for 100% copying, since some PAMMs do not have time to get here, being short-term or high-risk, while others are excluded before the end of the month. This portfolio contains successful PAMM accounts that, in my opinion, deserve attention.

This portfolio of PAMM accounts is a rough guide and indicator of opportunities. Here are collected PAMM accounts according to the criteria of stable profitability over the course of a year in which they invest a large number of investors.

You can also add more aggressive PAMM accounts, eliminate unprofitable ones in a timely manner and add new profitable managers.

As you already understand, an investment portfolio is created to reduce risks and increase the reliability of saving funds.

Formation of an investment portfolio

Example. If you have 12 projects in your portfolio and 2 of them were negative, then the advantages of the remaining ten will cover the loss and ultimately lead you to profit, which is clearly confirmed by our portfolio in the table above.

The second component of the investment portfolio formation will be percentage ratio, that is, how much proportionally to invest in each project.

Suppose that you invested 80% of the funds in a project that you really like and only 20% invested in the remaining 5-7 projects. Would this be the right diversification? Despite the fact that you have 6-8 components in your portfolio, your risks will be very high, since 80% of the capital will be concentrated in one place.

Of course, this does not mean that you need to invest " equally". For example, let's take high-risk/high-yield investments (for example aggressive or startups) - they already have an increased risk, so you need to invest smaller amounts in them than in conservative components.

It will be determined precisely by the division of contributions into conservative and aggressive components.

Which briefcase do you prefer?

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Investment portfolio of securities

Every investor who has faced the issue of allocating their investments has sooner or later come to the conclusion: Don't put all your eggs in one basket.

Stock market allows for extremely wide diversification of capital and protects it from excessive risks.

Some may find the approach described to be overly conservative, but the result will be 1200% in 5 years.

First of all, we will divide the deposit into two parts. The majority (70%) will be allocated to the conservative portion of the portfolio. The remaining 30% will be distributed as efficiently as possible among risky assets.

Conservative part

So, the formation of the investment portfolio of this part of the capital will be carried out as responsibly as possible, since in the worst case scenarioAs events unfold, it is this part that will help maintain a positive account balance. The predominant type of income will be passive.

There are several tools on the market that can provide this capability.

1. In first place will be government bonds(), the chance of default is close to zero. The payment for the guarantees will be a low return, which will be approximately 5-6% per annum.

2. In second place will be debt securities of leading companies, such as: Sberbank, GAZPROM, Magnit, Rosneft, VTB. The chance of default here is also extremely low, but not zero.

An increase in risk will be reflected in an increase in profitability for the investor, but it will be extremely small. 6-8% is the maximum that these papers can give us, but we don’t need more for now.

3. In 2010 at state level a law on microfinance by private organizations and foundations was adopted individuals. This has led to a number of mutual funds , which are traded on the stock exchange, have a fixed price and provide conservative earnings in 12-14% per annum. Such funds most often have a structure Closed mutual fund (closed-end mutual fund). To purchase such a product you must have status. Fortunately, many brokers are now synthetically assigning this status for a fee (5-9 thousand rubles).

  • In fact, they work like banks, providing loans to the population secured by real estate and other property. The profit, which is returned in the form of interest, is divided among all fund participants (minus wages management company). The difference is that Management Company, unlike bank management, provides more competitive rates. Such an interesting instrument will definitely have a place in our portfolio.

IN modern world it would be foolish to underestimate the influence dollar on the financial side of life of states and ordinary people. The risk of ruble devaluation forces investors to seek refuge in foreign currency assets.

But simply buying dollars would be too reckless.

After all, the dollar can become unstable under certain force majeure circumstances, so it would be nice for a conservative dollar position to generate income for us.

4. Large domestic companies nominated in dollars. The yield of the most stable issuers in foreign currency will be approximately 5-8% per annum ( VTB, GAZPROM, LUKOIL).

So, in total we have chosen about 4 instruments with different risks, but they are all conservative enough for our account to grow evenly and without jerks.

We will divide the money between them in different proportions.

  • OFZ– 20% (RUR).
  • Corporate bonds–20% (RUR).
  • Closed mutual fund–10% (RUR).
  • Eurobonds– 50% (USD).

Please note that we have completely neutralized the risk of the investment portfolio from fluctuations in the national currency, which will allow us to receive our returns regardless of sudden changes in the market. Our final percentage will be approximately 10% in combined currency (RUR/USD).

Speculative part

From this part of our capital we will try to build a risky and extremely profitable part of the portfolio. But even here we will not forget about common sense, and we will progressively move towards increasing the proportions of risk and profitability.

In the first place in this pyramid of investment portfolio formation are stocks that offer high dividends. The policy of corporations regarding payments to owners of a portion of profits is always changing, so current issuers will be presented.

Unfortunately, certain branches of production are very poorly developed in Russia, so we will limit ourselves to only a few items.

First of all, this preference shares Surgutneftegaz (raw materials, oil), MTS(telecom, services), MMC Norilsk Nickel (raw materials, non-ferrous metals).

Shares will be purchased at long term, so the specific price does not have a special role, but it is still recommended to enter them after a small pullback: 5-10% . On average, payments on these securities will fluctuate around 10-12% + change in exchange rate.

It is recommended to place the remaining part of the funds under the securities of startups and actively developing companies, where growth can exceed 200-500% per annum. The main task is to find several companies that would exceed our conservative income by at least 20-30%. Your broker can always help you with the selection and selection of companies; all you have to do is choose and make a decision.

This is what a sustainable and viable investment portfolio of a competent investor will look like.

Of course, the average total return on the portfolio will not exceed 20% per annum, but here many people forget that you can always top up your deposit.

Current profitability will allow us to double our capital in just 5 years without any special risks. But if we add to this regular replenishments from the main source of income, then compound interest will begin to work miracles.

This is what capital will look like with our profitability if we replenish it monthly by at least 10% and we'll invest approximately one million rubles:

Return on investment portfolio
Payment schedule
Calculation date Interest charges, rub. Paid tax, rub. Interest paid, rub. Deposit replenishment, rub. Deposit amount at the end of the period, rub.
1 year 107 617 7 533 100 084 x12 100,000x12 2 504 584
2 year 191 826 13 428 178,398 x12 100,000x12 4 309 654
3 year 292 824 20 498 272 326 x12 100,000x12 6 474 617
4 year 417 391 29 217 388 174 x12 100,000 x12 9 074 003
5 year 559 236 39 146 520 090 x12 - 12 085 313

In total, in 5 years from 1,000,000 we will increase our capital to 12,000,000. Decent earnings, right?

Of course, in the example above, over 4 years we still reported 4.8 million, but there is a better example where instead of replenishing capital, we use reinvestment, that is, the profit received is invested again.

This is a more affordable investment ( from $10) V PAMM accounts, and the picture is no worse:

In just 3 years of investment, compound interest turns our profit into 814.6%!

It is not limited to just planning new investments, because instead you can use the profits you have already received.

For example, in the first month you invested 100 dollars into a PAMM account, in the second month you invested another 100 to another PAMM account, in the third month they also invested in third PAMM account, but then you will be able to invest in new PAMM accounts profit received in 3 months from the first PAMM, in 2 months from the second and in a month from the third. Further, in the same way, you will only reinvest by expanding your portfolio. The same can be done in the stock market.

In addition to finance itself, investment portfolio management helps control current risks, for example, getting rid of an unprofitable asset in time and purchasing a new one instead. Personal consultants from your broker can help you in searching for new assets or analyzing current ones. They will not make the decision for you, but can help by providing key information on the assets and their current condition.

An investment portfolio may have different assets, but you should always remember to plan the portfolio in order to clearly understand the risks and not exceed them if the composition of the portfolio changes. In addition, you should have an idea aboutupcoming profits, opportunities for portfolio development thanks to or systemic capital replenishment.

However, it becomes extremely clear that the investment portfolio itself can already reduce risks to zero and lead the investor to stable profits.

How do you feel about portfolio investments?

09Apr

What is an investment portfolio

Like all our articles on investment topics, we’ll start with one well-known axiom of successful businessmen:

Money must make money

It is precisely in order to increase your income, even while in the same position and receiving only indexation to your salary, that you can collect a fortune by investing.

We have sorted out the theoretical basis in the context of “Why is this even needed?”

Now let's move on to investment portfolios. This concept can have two meanings: broad and narrow. Let's start with a narrower one.

Investment portfolio – a set of securities in which an investor invests in order to make a profit. These can be stocks, bonds, options, futures, trading contracts, exchange financial instruments etc. They have one thing in common - these are securities, an investment in which with a certain degree of probability will bring profit.

The narrow meaning of this definition is more suitable for professional investors, major players. Some of the main investors in Europe are banks and. Let's look at their example of the specifics portfolio investments and their difference from straight ones.

Portfolio investments always perform one specific task: to bring profit to its owner. Moreover, they bring profit simply by being in the portfolio. To fully understand the meaning of this, let's look at some theory about private equity.

Direct investments – investing in company shares to obtain a significant/major share in the board of directors. That is, direct investment is the purchase of 51% of the shares of a company in order to completely subordinate it to oneself.

Let's look at the example of banks again. They buy shares in insurance companies and force them to act in their interests. They insure deposits, people, their health, loved ones and other transactions in order to maximize income. But at the same time, such investments pay off provided that the company whose shares were purchased acts in the interests of a larger “fellow”.

And thanks to this you can catch the difference. Direct investments are aimed at “subordinating” the company by purchasing the lion's share of shares and subsequent participation in management, while portfolio investments are aimed at generating income.

An investment portfolio in a broad sense is a somewhat more everyday concept than its narrow meaning. And it makes no sense to consider it, because many people know about investing in a bank, in real estate, or simply lending it to a friend. In this article we will focus specifically on portfolio investments in securities.

Advantages and disadvantages of portfolio investments

Let's start with the most important question: the advantages and disadvantages of portfolio investments. Let's start with the positive.

Advantages

Liquidity. The first and most important advantage of portfolio investments in securities is the liquidity of investments. In most cases, investors invest their money in highly liquid or medium liquid securities, thanks to which, if necessary, they can easily get rid of them without a significant loss of value (and often with a profit).

It is precisely because you can sell all your securities in one or two hours without losing value that this principle comes first.

But this does not apply to all securities. Despite the fact that they are traded on the stock exchange every second, some securities may only be in demand after 2-3 days, or even more. But this category includes little-known companies that no one knows. There is very little trust in them, their securities are bought with great caution, but the investment is often justified.

Openness. fairly open to the general public. This applies to both pricing mechanisms and trade volumes. Here you do not need to independently study statistical data in order to determine at what price this or that security will need to be sold (unlike Russia’s favorite real estate market). It's all in open access for any person, just go to the Moscow Exchange website.

It is openness that allows even the most ignorant person to see several factors: price dynamics from period to period, the volume of investments in a particular security, as well as the spread - the difference between the purchase and sale prices.

This data is always made public, so everyone can evaluate the effectiveness of investments. The same cannot be said about other types of investments such as real estate, business, investment funds or bank deposits. The pricing mechanisms there are more nebulous, and prices fluctuate depending on strange factors.

Profitability. Securities can immediately be classified as highly profitable financial instruments. Moreover, shares, as one of the most profitable types of securities, can bring money in two cases at once: upon payment and when the value of the security itself increases.

And if you look at the distance, they bring huge profits to their investors in cases where an unknown company breaks into the market.

Easy to operate. Securities are also good because you can buy highly reliable shares and simply forget about them for a while. Dividends will be transferred to your bank account without your direct participation.

However, this is a double-edged sword. On the one hand, you have a fairly good income, but on the other hand, with proper management, profitability will increase significantly.

In general, securities have good advantages that make them a fairly profitable investment in the hands of professionals, and moderately profitable in the hands of novice investors.

But in addition to the advantages, portfolio investments in securities also have a number of disadvantages.

Flaws

Riskiness. The main rule of finance is that the higher the risks, the higher the income. And if securities are a highly profitable asset, then the risks there will be correspondingly high.

Knowledge requirements. Entering the securities market without basic knowledge is akin to suicide. And this is not because there are only sharks at the RCB who are ready to hit the jackpot from the newcomer. This stereotype. Just without basic knowledge, even with sufficient luck, you will very quickly lose your entire investment account without increasing your capital.

Investing in securities can be compared to poker. Even the luckiest player, who does not know the theory, only the basic rules of the game, will have a moment when he is simply overwhelmed by experience. You cannot be lucky forever, so without a theoretical basis there is nothing to do there. Especially if you don't have crazy luck.

Analysis. This is the biggest problem. Many people's inability to analyze situations can simply ruin their investment account. In order to invest wisely, you do not need to have a huge amount of knowledge and special skills. It is enough to correctly build cause-and-effect relationships.

But most investors forget about this. A competent analysis will allow you to identify a negative trend several days before it begins, minimize risks and get maximum profit even when the market is going down.

Let's move on to the types of investment portfolios. This is very important information, knowledge of which will help you form your own investment principles. First, let's start with the most general and popular classification.

Conservative portfolio. In the mid-20th century, conservatism was the most important principle of investing. It was better to receive less money than to lose it completely.

A conservative investment portfolio is built on the principles of high liquidity and minimal risk. Consequently, most of them will be bonds, financial instruments, and a few percent of shares.

Suitable for beginners due to low knowledge and skill requirements. Such investments allow you to gain experience and receive your first income, which can be directed to something more interesting and profitable.

Aggressive portfolio. It contains high-yield securities. And as you already understood, the higher the profit, the greater the risk. Therefore, it will be dominated by stocks, less often financial instruments, and a very small part will be bonds.

Suitable for experienced players who are not afraid to take risks, can competently assess the prospects for enterprise growth, profitability and, in general, can predict market behavior. Highly not recommended for beginners. Average investment funds love this style.

Combined, mixed or moderate. An investment portfolio in which the conditions of reliability and profitability are equally met. This cannot be said to be a golden mean because some securities will be overvalued by the market, even if the companies are highly reliable, and some fairly profitable stocks will have minimal risk.

Forming an investment portfolio is a case when it is better to choose extremes rather than combine styles.

According to the degree of dominance of securities, we can distinguish: diversified(a portfolio with approximately equal shares of different securities, without a strong predominance of one) and with a predominance of some securities.

The first is more balanced due to the fact that many different investments compensate each other in case of drawdowns. The predominance of one security forces the investor to “bet” on it, and take the rest only for insurance.

Also, according to the method of generating income, we can distinguish:

  • Growth portfolio. Focused on buying shares whose value will rise;
  • Income portfolio. Focused on the purchase of securities that will generate income (from redemption, dividends, etc.);
  • Short-term portfolio. Focused on purchasing highly liquid shares for their subsequent resale;
  • Long-term portfolio. Purchasing shares (regardless of liquidity) to obtain a stable income;
  • Regional portfolio. Purchasing securities of one specific region. Allows you to concentrate on a narrower market segment;
  • Industry portfolio. Purchasing securities of one industry. The same as in the previous case - using your knowledge to narrow the field of investment;

Knowledge of the classification allows you to more fully and competently imagine how to follow the path of a competent financier, what to invest in and in what cases. And now about the principles of investing.

Principles of portfolio investment

Now let's talk about what principles underlie the formation of an investment portfolio.

Target orientation. This is the most important principle of investing in general and portfolio formation in particular. The main thing you need to decide is why you are investing in securities in the first place.

There may be several options: saving money (indexation for inflation), obtaining maximum profit, gaining initial experience in investments, acquiring skills in analyzing the securities market in real time, generating completely passive income, etc. You can continue ad infinitum.

The main thing to remember is that you need to set a clear goal, adherence to which will be the key to correct and successful investments.

After forming the task, it is already necessary to set smaller goals:

  • Find highly liquid securities for resale;
  • Create a conservative investment portfolio for passive income;
  • Buy shares that will grow in the future to maximize;
  • When trading on the stock exchange, use leverage to develop intraday trading skills.

There may be many goals, but they must be there.

Balance of risks and income. The balance of risks and income is the most controversial issue on which investors cannot find a compromise. Some say that simply generating income is very important, others believe that it is high profit figures that make the stock market so attractive.

Everyone must decide for themselves, based on their goals, exactly how to balance between risky operations and profit. But do not forget that in some cases high profit is not associated with high risk. This is rare, but it happens.

Liquidity. Do not forget about the liquidity of your securities. You need to buy and sell over and over again and that is why a high “saleability” will make your assets very attractive.

But there is one interesting opinion - low-liquidity assets can be more profitable. This is true, because low-liquidity securities are securities of the 3rd tier, that is, little-known companies, kind of dark horses. It is precisely because of the undervaluation of the securities of a particular issuer that such a huge, at first glance, profitability is formed.

Diversification. Distributing risks between several assets is something absolutely every investor cannot do without. And the point here is not that you need to balance between high-yield securities and reliable ones. It’s just that portfolios with a large number of different assets give the investor more freedom of action to change the mix of his securities.

If you have one type of stock prevailing over the majority, this means that with a 90% probability you will not be able to remove them from your investment portfolio, even if you see that they are unprofitable. And if there are several papers in equal shares, then parting with one of them will be less painful.

What is included in the investment portfolio

The investment portfolio may include the following assets:

  • Stock;
  • Bonds;
  • Futures;
  • Options;
  • Bank deposits;
  • Currency;
  • Precious metals;
  • Real investment.

Stocks and bonds– peculiar antagonists in the world of securities. While the former are risky, bring high returns and can make a person millionaires in the long run, the latter are more conservative, not suitable for short- and medium-term trading and are designed for passive investors.

Investing in shares implies constant monitoring of the company's activities, while bonds, on the contrary, require almost no attention. It’s not for nothing that shares are used to collect initial capital from most companies, and bonds are preferred by the state for borrowing from the population.

Financial instruments like futures and options are an interesting type of investment in securities. To put it very roughly, these are bets on economic events. The use of these instruments requires certain knowledge and skills, but despite this, the futures market is the “kindest” for beginners.

Bank deposits and deposits. Banks, whatever the current situation in banking sector, still remain the most reliable means of investing small and medium amounts.

For those who want to create a completely passive income for themselves, bank deposits will be an excellent means of covering inflation and creating a small “safety cushion” if another crisis breaks out and the securities of selected issuers suddenly go down the drain.

Currency and precious metals. At the same time, it is advisable to choose a currency based on the current economic situation in the world, soberly assessing the prospects of a particular country.

In the event of a crisis in Europe, you should always look at the dollar; in the event of a crisis in America, you should always look at the Euro or Pound. Plus, cryptocurrencies are now gaining popularity, the leading of which is still Bitcoin.

This is an excellent way to cover inflation, because the trend is that over the past few years, this currency continues to increase, and in about 15-20 years its production will completely stop, which can make bitcoins an analogue of gold.

Speaking of precious metals. – one of the most interesting types of investments. You can invest cash and you will be given a certificate stating that you own a certain amount of precious metal.

Interest will be charged on it, in which case you will be able to withdraw the money, and along with the increase in the value of the metal, your account will increase. But an impersonal metal contribution is a way long-term investments, or savings before the crisis.

Real investment– investments in real estate, business, share of a startup and other assets that can be touched to one degree or another. Culture is still not widespread in Russia real investment, and for ordinary people, the most popular option is still investing in residential real estate.

Here's what an investor's portfolio might consist of. There may not be any specific positions, for example, instruments, real investments, metals and currencies. The main backbone is still securities, mainly bonds; for more conservative investors, the lion's share is made up of deposits in banks.

Step-by-step instructions for creating an investment portfolio

Now let's move from theory to practical part, namely step by step instructions on how to build your investment portfolio.

Step 1. Selecting investment goals

As we said earlier, the first thing to do is choose your goal. The question “Why am I investing money” must be approached with all seriousness, based on the information above.

Goals can be divided into two areas:

  • Why do I invest;
  • How much do I invest?

Having answered these two questions, you can move on to the next step.

Step 2: Define your strategy

After choosing your goals, you will need to decide which strategy to use. An aggressive strategy allows you to earn money while taking risks, a conservative one allows you to survive inflation and have truly passive income, and a mixed one balances on the edge (does nothing).

At the same time, you should not think that adherents of aggressive strategies are thoughtlessly buying shares that can go uphill. They take into account the same risks, expected profit and are engaged in predicting the behavior of the price of a particular asset.

In fact, what distinguishes them from conservatives is the object of their investment: aggressive investors will prefer to invest shares in an unknown company that can take off, while conservatives will prefer fame and reliability.

Step 3. Finding a broker

Then you should find yourself good broker. There is no need to talk long about stock brokers. Just analyze the activities of several companies, find out if there are banks in your region that provide brokerage services, if not, contact specialized companies.

Step 4. Selecting investment objects

Now comes the hard part. The time has come to decide on the object of investment. In the first 4-6 months it is better to be conservative. Study the market, price it, gain experience. It is advisable to invest in the most reliable shares (blue chips), about 1-5% in government. bonds (although, frankly speaking, the yield on them in 2017 will be lower than on bank deposits),

Some statistics: 5 investors out of 100 lose their investment account to zero, and then within a few years. If you do not engage in mindless gambling/trading on the stock exchange, it will be very difficult to lose your money. And even more than half of the investors make a profit.

Therefore, do not be afraid to invest your funds in securities. Just for starters, in the first year investment activities, we strongly recommend that you keep about 50% of your funds in the bank, using profits to increase investment volumes.

Step 5. Analysis of the created portfolio

Then comes the most interesting time. You will have to monitor how your portfolio is performing from time to time. If you are a conservative, you will just need to periodically monitor the course and at least once a week look at the news of the companies in which you have invested.

But if you choose an aggressive style, then you will have to watch the market much more often. You need to not only read the news on the company’s website, but also look at the quotes every day, constantly look for the “underdog” company - a greatly undervalued newcomer to the market, and look at those who are overvalued. This is complex analytical work that will bring a lot of income if done correctly.

Step 6. Portfolio optimization

Optimization follows from the analysis. If the issuing company in which you invested shows poor results, falls, and the financial result is consistently negative, then you should part with these securities. Or hold them, leaving the belief that they will rise again, pushing off from the crisis bottom.

The approach to portfolio optimization is individual for everyone. Conservatives rarely change their choice, aggressive players part with securities once a week or month, and average players try to sell when the price is up and buy when it drops significantly.

Step 7. Making profit and using it

The last and most delicious step. Making a profit is what all people invest for. own funds. If this is not your passive source of income, then you should use the profits to expand your investments.

How much profit to put back into business is up to you to decide. Experienced players recommend doing this at a rate of 70/30.

A little secret: many people who are involved portfolio investment, hit a real jackpot in moments of crisis. The moment when the market is oversaturated, the financial bubble bursts, most companies are a real paradise for those who can assess the real prospects of companies without panic. Just look at the movie “The Short Game,” which tells the story of how several financiers saw the economic bubble in the real estate market in America and took advantage of the situation.

But we haven't mentioned one very important step here. Even before you start setting investment goals for yourself, you need to study the necessary theory. There is no need to carefully study the principles of pricing.

A short digression about paid online training in stock trading, investing and other similar things. Often this is complete nonsense and they are trying to sell you knowledge that you can get for free. You can learn to invest: on forums, by reading specialized literature (there is free literature, but it is advisable to purchase a paper version) and by reading blogs of successful investors. But, of course, occasionally there are very good courses.

The method well formulated by Brian Tracy is perfect here: Find out how they do it successful people in your area and repeat after them. Collect the thoughts and skills of successful investors, and you can make profits just as good as them.

Financial intermediaries

We cannot help but touch upon the topic of financial intermediaries. To do this, let's turn to the west. The culture of financial investment there is much better developed than in Russia. Every Western and American family owns shares of 2-3 companies and is ready to invest a small amount into a new and promising business.

But besides investing on your own, there are many investment funds out there that people transfer their money to to generate income. The funds operate at the expense of clients' funds, guaranteeing them a fixed income. If they show a large profit, they take their commission.

But in Russia the situation is somewhat different. We do not have a culture of independent investment as such. At the same time, financial intermediaries in the field of investments are still in their infancy.

Another negative point is fake profitability figures. Investment funds on their websites show annual returns of 60%. It is clear that this result is nothing more than drawn figures, because it is simply impossible to show such indicators for more than one period, because investment funds are primarily interested in stable income generation, and not big numbers.

But two financial intermediaries are worth paying attention to.

Mutual funds

Or as they are called mutual funds for short. The way they work is this: you buy investment share for a predetermined price, and according to the purchased “share”, at the end of the period (usually a year), you receive your funds back + interest received.

At first glance, everything is very attractive. You simply invest money, and professionals in their field work and keep a commission for themselves if they come out with a big profit. In reality, everything is not so rosy in Russia. Drawn numbers, big risks, periodic closures of banks. and, accordingly, their investment funds. All this together does not give a very positive result.

However, at the end of 2016, the Central Bank seriously took up investment direction and introducing a culture of investment into the Russian economy. That is why we should expect more serious operations to control the activities of mutual funds.

This means that around 2018, investment funds will have to completely whitewash their activities, show real profitability figures and generate profits 1.5-2 times higher than a bank deposit.

Broker banks

There is a different principle of financial intermediation here. Broker banks provide the opportunity and tools for trading on the securities market. Moreover, they carry out all operations on your instructions. But there is one trick - you can always talk with bank employees about investment objects, volumes and strategies for investing your funds.

Employees of any brokerage company are well aware of what is happening in the market, and therefore they can happily advise their client. By talking to them you can get practical advice about what is currently suitable for investment, what should be gotten rid of, and what is overvalued.

The broker is interested in your profit, because he receives a commission from your transactions. That is why its employees will help you in every possible way.

Analysis of the effectiveness of the investment portfolio

The effectiveness of an investment portfolio is a somewhat vague concept. For some, it is saving money, for others, it is a constant increase in income. Still others generally prefer to create passive income for 5-10 years. But despite this, the analysis of the effectiveness of an investment portfolio has a common point.

An investor is primarily interested in money. That is, income. That is why the main principle of an investment portfolio is profitability. It shouldn't cause losses. Every time you should get net profit from your investments. This means that you need to cover inflation and the commission of the brokerage company that allows you to carry out your activities on the stock exchange.

The simplest and effective method analysis of the effectiveness of the investment portfolio - look at the distance to see whether the profit on invested funds is increasing. If it increases, it means that you are doing better than 80% of investors. If the profit is stable plus or minus, then you receive your income without developing as an investor. This is good for those who create passive income with a minimum investment of time and effort.

But if profits decrease and the investment account shows losses, then steps should be taken to optimize the investment portfolio.

Portfolio optimization

It is unlikely that you will be able to create an optimal investment portfolio the first time. The market is volatile, and what seemed profitable and stable yesterday is now bringing only losses. That is why you need to optimize your investment portfolio at least once a month.

You analyze the behavior of your securities over several weeks, and if they perform consistently poorly, you will need to do several things:

  • Find the reason;
  • Make a forecast;
  • Act according to this forecast.

Everything is very simple here.

If stocks show negative results, the reasons may be as follows:

  • Negative economic situation in the country;
  • Industry decline;
  • Internal problems of the company;
  • Change of leadership positions;
  • Undervaluation of shares;
  • Getting rid of overestimation.

Let's look at the reasons why you need to change securities:

  • Industry decline;
  • Getting rid of overestimation;
  • Internal problems of the company;
  • Negative situation in the country.

They are positioned this way because industry decline is the primary reason to divest a company's securities. If an industry becomes unprofitable, it means that it will only get worse.

Example: oil companies in 2014-2016. During this period, these companies suffered colossal losses due to the fall in oil, and in general their securities should have gone down the drain if not for governmental support, which covered all their losses. But there were significant drawdowns, especially against the backdrop of the rising dollar.

When the market “opens its eyes” and realizes that it has overvalued a particular company, a massive sale of securities begins. After it there will be no sharp takeoff, or even at least a gradual “gain in altitude.” That is why, as soon as you see that the market has “seen the light”, feel free to sell the securities.

Internal problems of the company are a reason to get rid of securities during an aggressive play. To understand why, just turn to the famous Apple. As soon as the media learned that Steve Jobs was ill, the Apple company's shares began to rapidly lose value. And if it weren’t for the colossal popularity of the brand and the corresponding revaluation, they would not have recovered to this day.

The negative situation in the country's economy is the last and not the most obvious problem. On the one hand, unprofitable securities should be gotten rid of, but on the other hand, there is a crisis in the country as a whole, so the same thing will happen in many industries and companies.

Here are reasons to optimize your portfolio. The optimization process itself is simple - sell securities as soon as you feel that you have squeezed the maximum out of them.

Basic mistakes of newbies

Now let's talk about the two main mistakes of newbie investors/

Mistake 1. Lack of purpose.

This is the most serious mistake that we talked about at the beginning of the article. Investing without a goal is simply losing your money. If you don’t understand why you want to invest your finances, you have nothing to do in the securities market.

Mistake 2. Deviation from strategy.

Each investor forms his own investment strategy. You can take someone else’s, but over time you will still adapt it to your needs. You must always stick to your strategy, and there is only one case for deviation: it is unprofitable over the medium/long distance.

It will take you at least a month to understand whether you are making the right decisions. But if you change the principles and approaches to choosing securities every week, you can forget about profit.

Conclusion

Portfolio investments - type financial investments, which are aimed primarily at making a profit. The object of portfolio investment can be securities, bank deposits, currencies, metals and real types of investments, which include real estate, shares in business, construction, startups, etc.

The main principle of portfolio investment is risk diversification. This means that you must divide your funds into several areas or securities. This is done in order to minimize losses and be able to calmly get rid of this or that asset.

To start collecting an investment portfolio, you need to set a task, find a broker and purchase the necessary securities. After that, you analyze the profitability of your securities, change them in case of negative indicators and enjoy the profit.

Remember that investing, even in the absence of special knowledge, most often brings profit.

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