How To Guarantee a Profit on Your Stock Portfolio

Investing your stocks is one way to make your moneywork for you, whether it’s long-term or short-term. However, stocks do carry some risk, and it takes a certain savvy to make money off the stock market.

Here are some tips to guarantee a profit on your stockportfolio:

Form an investment strategy. Find out what your risk tolerance is and your preferred time horizon. This will determine the types of stocks you can invest your money in, or better yet, what stocks not to invest in. Stick to your strategy and make changes only when necessary, like when the general market outlook has shifted. This will prevent you from making decisions based primarily on emotions.

Invest when prices are low. No matter how good blue chip companies are, they inevitably rise and fall with the rest of the economy. Thus, the best time to buy their stocks is right after they hit bottom. Good companies will almost always bounce back once the market picks up, bringing your investment up along with them.

Pick blue chip companies. Quality companies have a reputation among the investment community for being safe and reliable, fueled by solid balance sheets and strong management. Their shares are also highly tradable and while they grow less rapidly due to the onset of maturity, these companies can be counted on to develop with expected consistency.

Diversify. By investing in several types of stocks with different rates of peaks and troughs, you can protect yourself when any one stock fails. If one stock has too much of your cash, reduce and distribute it to several others. Pace your investments over a length of time and choose stocks from different segments of the market.

Check your portfolio every month. Don’t be involved in the day-to-day performance of your stocks. Rather, spend months or even a year ignoring it.  By being less engrossed, you have a better chance to see the long-term growth without being muddled with short-term activities and the consequent emotions tied into them.

Hire a financial advisorStock experts can bring years of experience and connections into their decision-making, making them a solid advantage when it comes to investment. Research your short list of advisors before choosing one; rate them according to fees, performance, endorsements and personal assessment. It helps to be financially literate when evaluating these experts to avoid being confused with the jargon and concepts.     

Be a consistent investor. Whether stocks rise or fall in the short-term, the market as a whole has performed well above other classes of assets. Continue investing throughout your designated time period, despite hiccups that inevitably occur in the market.

While profiting from your portfolio is never a certainty, you can do a lot to reduce the risks and improve your chances by studying the market and your choices. Avoid making emotional decisions and falling into mob instinct. Learn from your lessons and avoid illegal actions, and pretty soon your performance will improve over time.