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Investment

How to create a stock investment portfolio

Are you thinking of a Christmas present that you could enjoy and at the same time bring you a net return of a few percent a year in the years to come?

If you want to succeed, there is nothing easier than creating a stock investment portfolio.

You do not have to have hundreds of thousands of crowns to create a stock investment portfolio. For a start, just ten thousand crowns and then gradually buy. Let’s say that two to three thousand crowns a month is enough to start. Study the professional literature before you start building an investment portfolio.

What shares to buy?

If you buy in the RM-System mode, you can buy from one share to several hundred for ten thousand crowns. You should keep in mind that it does not matter how much each share costs, but what the company’s potential is and whether it pays a dividend or plans to pay it in the near future. Holding stocks just because their value may increase is not the best way to make money.

Novice investors often make the mistake of wanting to own as many stocks as possible. This then adds to the fact that they buy such titles as the securities of JČ Papírny Větřní, which cost eight crowns.

When to shop or Do not time!

Look no starting field to buy stocks. Simply tell yourself that you will buy this and that security and do it. It is not appropriate to think that the now-coveted security is falling by units of percent for the third day in a row. There are many twists and turns in the life of a stock, which at one time catapults its value to dizzying heights and at other times knocks it almost to the very bottom.

Therefore, do not look for a good time to start shopping. Technically, this is called market timing, and almost no one in the world can time their purchases well. To build an investment portfolio that you want to hold for several years to decades, it is important only how much and how often you buy.

Stability of yields in defensive industries

Sometimes the front pages of newspapers fill up with information about a new company whose shares skyrocketed from day to day to dizzying heights. The struggle for the company’s securities takes place immediately, and investors give all their money to these shares. The good advice is that it doesn’t make sense to invest in one security. In this case, too, you need to diversify your equity portfolio.

Therefore, buy stocks of companies that operate in industries that you understand and that you think have some potential for the future. These are not necessarily high dividends, but a net return of a few percent a year is a solid result in itself.

For a beginning investor, it is advisable to invest in fields that are so-called defensive. This means that these are industries and companies doing business in them that are not dependent on fluctuations in economic cycles. For example, telecommunications companies, but also energy or water companies still have the same returns in times of growing economy and in its downturn.