5 Secrets For Gold Plating Your Stock Portfolio!
What strange human foible makes us do this? Well, it might come down to one of two main reasons. One reason is we might not know where to start. We think of managing money as something someone far more financially savvy should be doing. Not us. In other words, managing money to many investors is downright intimidating.
Another reason may be that we know our existing portfolios are like overgrown, unattended gardens filled with plants that need pruning and that are being choked out by weeds, and who wants to acknowledge such a mess?
We just don’t want to deal with the unpleasantness of finding stocks that have been kept well past their primes, and missed opportunities up the “yin yang,” so to speak. So we’d rather ignore its existence than to admit mistakes and start giving it the attention and care it deserves. That’s why my number one rule to gold plating your stock portfolio is to…
1.) Start Now!
Yes, start now! Sadly, and unfortunately, it is not until much later in our lives— when we are facing the prospect of retiring— that we start getting serious about managing our money properly. Don’t let this happen to you!
Because I know this phenomenon from my own personal experience, I want to share with you some hard-won secrets as to how to start a portfolio, or change your existing stock portfolio from a disorganized jumble of half-baked stock investment ideas into a dynamic, well-organized juggernaut of ever-increasing value. Something you may even come to enjoy managing!
Though many publications are good sources for finding quality stocks, the one question they will not generally answer is that very crucial question as to when to buy them. We'll talk about more about this in our next installment.
2.) Invest In Just A Handful of Stocks
We talked earlier about the “intimidation factor.” Well, nothing is more frustrating and yes, intimidating, than trying to keep your eye on a whole bunch of stocks at the same time, some of which are up and some of which are down.
To overburden yourself with this kind of “high maintenance” situation is shear madness, and more likely to make you give up on your pursuit of a gold-plated stock portfolio, than to see it through.
We naturally tend to place most of our attention on our jobs—namely, making money. So you want to make the experience of managing your own money pleasurable from the very start. That’s why I recommend limiting your portfolio to a select few powerhouse stocks that will simplify the experience of managing your portfolio, namely:
>>> 3 to 5 winners during “okay,” but not great markets, and
>>> Only 5 to 7 winners during strong markets
Having a smaller number of stocks to follow ensures that you’ll be able to easily keep track of your stocks on a day-to-day basis.
In my next article in this series, I’ll be talking about what kinds of stocks to include in your portfolio, and where to find them, so stay tuned!