Article

Ten questions you must ask yourself for boosting your portfolio

07 Aug 2019 Nutan Gupta

It is always hard to lose money on your investments. Apart from taking a financial toll on you, it also negatively affects the overall performance of your portfolio. Here are ten questions you must ask yourself which will help you to boost the performance of your portfolio:

1. How much money do you have on hand?

Having too much cash to trade when the market is at its peak can limit your profits by a considerable margin. You have to figure out how much money you want to be invested and how much you want as cash to invest in the future. A common strategy is to have 50% of your portfolio money as investments when the market is down so that you can invest the remaining 50% when the market rises.

2. Do you have international exposure?

Trading in stocks internationally can allow an investor to book profits if the Indian share market is not doing very well. You have to question yourself if you want to have international exposure or the Indian share market is good enough to achieve your financial goals. By looking at your portfolio, you can figure out if the profits from the Indian share market enough or you should trade in international stocks.

3. Have you invested in ETFs?

Exchange traded funds are one of the best investment options right now; they mimic the operations of an index fund and gives exposure to the stocks of several companies at once. When you trade in an ETF, you don’t have to buy the shares of companies separately but have to invest in an ETF of your choice to get exposure to the stocks of every company of that ETF. If you still haven't invested in an ETF, you should positively consider investing in one.

4. Are you over diversified?

While diversification is a good thing to spread risk across various investments, over-diversification can lead to complexity of the portfolio. Having few investments of superior quality is always better than having many investments of ordinary quality. You have to figure out if you are having problems in monitoring and controlling your investments. If the answer is yes, you are definitely over-diversified, and you should consider selling some of the investments which are not doing good.

5. Is your broker’s performance satisfactory?

Why are you incurring losses in your investments? Is it you or the advice of your stockbroker? You should analyze your every trade before moving on to the next one and figure out the primary cause of your loss. Consult your friends and relative and ask them about the facilities their stockbroker provides them to make their trade successful. If you find that the performance of your stockbroker is not up to the market standards, you should hire a better stockbroker for your future trades.

6. How much time are you spending on market research?

You could be spending 5 minutes on researching a company and would still wonder what you did wrong when you incur a loss. You have to thoroughly research the company and the investment before you invest your money in its stocks. If you find yourself with limited knowledge about the market, try reading investment books and financial articles to kick-start your successful investment career.

7. Are you trading on your own?

Having someone else trade for you is like giving someone your own money to buy things you would want ten years from now. No one knows your financial condition better than you, and only you can figure out the amount of money you are comfortable losing in the share market. If you are having someone else trade for you, you should immediately stop and take matters into your own hands. It will be only after trading on your own; you will find success in your investing career.

8. Do you have some financial goals?

Every decision you will take during the investment process will be directed towards achieving your financial goals. There is no point in investing if you do not know what you are investing for. Make some long term and short term financial goals and make every possible effort to achieve them. Every time you make an investment decision ask yourself this question: Will this investment help me to achieve my financial goals?

9. Is your investment strategy adequate?

If you are making continuous losses on your investments, maybe it is the time that you rethink your investment strategy. It could be possible that you have made huge profits in the past, but the fact that you are incurring consecutive losses makes your investment strategy obsolete to the present market conditions. Consult your stockbroker and come up with a new and adequate strategy for your investments.

10. Are you overspending?

Is your broker charging you with high commission? Are you paying taxes that can be avoided? Always go with a brokerage firm that charges flat brokerage fees and not a commission and consult your stockbroker about different ways you can cut your taxes. It will enable you to increase your profits by a huge margin and you will have more money to invest in the share market. 

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Ten questions you must ask yourself for boosting your portfolio

07 Aug 2019 Nutan Gupta

It is always hard to lose money on your investments. Apart from taking a financial toll on you, it also negatively affects the overall performance of your portfolio. Here are ten questions you must ask yourself which will help you to boost the performance of your portfolio:

1. How much money do you have on hand?

Having too much cash to trade when the market is at its peak can limit your profits by a considerable margin. You have to figure out how much money you want to be invested and how much you want as cash to invest in the future. A common strategy is to have 50% of your portfolio money as investments when the market is down so that you can invest the remaining 50% when the market rises.

2. Do you have international exposure?

Trading in stocks internationally can allow an investor to book profits if the Indian share market is not doing very well. You have to question yourself if you want to have international exposure or the Indian share market is good enough to achieve your financial goals. By looking at your portfolio, you can figure out if the profits from the Indian share market enough or you should trade in international stocks.

3. Have you invested in ETFs?

Exchange traded funds are one of the best investment options right now; they mimic the operations of an index fund and gives exposure to the stocks of several companies at once. When you trade in an ETF, you don’t have to buy the shares of companies separately but have to invest in an ETF of your choice to get exposure to the stocks of every company of that ETF. If you still haven't invested in an ETF, you should positively consider investing in one.

4. Are you over diversified?

While diversification is a good thing to spread risk across various investments, over-diversification can lead to complexity of the portfolio. Having few investments of superior quality is always better than having many investments of ordinary quality. You have to figure out if you are having problems in monitoring and controlling your investments. If the answer is yes, you are definitely over-diversified, and you should consider selling some of the investments which are not doing good.

5. Is your broker’s performance satisfactory?

Why are you incurring losses in your investments? Is it you or the advice of your stockbroker? You should analyze your every trade before moving on to the next one and figure out the primary cause of your loss. Consult your friends and relative and ask them about the facilities their stockbroker provides them to make their trade successful. If you find that the performance of your stockbroker is not up to the market standards, you should hire a better stockbroker for your future trades.

6. How much time are you spending on market research?

You could be spending 5 minutes on researching a company and would still wonder what you did wrong when you incur a loss. You have to thoroughly research the company and the investment before you invest your money in its stocks. If you find yourself with limited knowledge about the market, try reading investment books and financial articles to kick-start your successful investment career.

7. Are you trading on your own?

Having someone else trade for you is like giving someone your own money to buy things you would want ten years from now. No one knows your financial condition better than you, and only you can figure out the amount of money you are comfortable losing in the share market. If you are having someone else trade for you, you should immediately stop and take matters into your own hands. It will be only after trading on your own; you will find success in your investing career.

8. Do you have some financial goals?

Every decision you will take during the investment process will be directed towards achieving your financial goals. There is no point in investing if you do not know what you are investing for. Make some long term and short term financial goals and make every possible effort to achieve them. Every time you make an investment decision ask yourself this question: Will this investment help me to achieve my financial goals?

9. Is your investment strategy adequate?

If you are making continuous losses on your investments, maybe it is the time that you rethink your investment strategy. It could be possible that you have made huge profits in the past, but the fact that you are incurring consecutive losses makes your investment strategy obsolete to the present market conditions. Consult your stockbroker and come up with a new and adequate strategy for your investments.

10. Are you overspending?

Is your broker charging you with high commission? Are you paying taxes that can be avoided? Always go with a brokerage firm that charges flat brokerage fees and not a commission and consult your stockbroker about different ways you can cut your taxes. It will enable you to increase your profits by a huge margin and you will have more money to invest in the share market.