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Strategy
No. 9:
Regularly Review your Portfolio
Conditions and
situations change, so it is important that you regularly
review your portfolio. Every few months, go back to your
investment plan and see if your needs or conditions have
changed. Consider whether some stock should be sold, or
others bought. It may be a good idea to reduce your
holdings in a sector that looks set to experience low
growth for some time. Or increase your stock in a strong
growing sector.
If the share price of
one of your companies has been steadily falling and is
below what you bought it for, consider whether you may
be best cutting your losses and selling out of that
company. You may be reluctant to make a loss on that
stock but consider it in a different light. Selling now
gives you the cash to invest in other stocks which may
increase in value. Before long you may have recouped
your losses and begun to make a profit. Holding onto
non-performing stock is opportunity lost.
Also keep an eye on
changes to your taxation arrangements. And to changes to
taxation law. There's no point making handy profits if
you've got to hand too much of it over to the
government. The key to holding a successful share
portfolio is in the portfolio's management. Keep a
constant eye on it.
Next:
Borrowing to Buy
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