How to Do a Stock Portfolio Checkup
In this article today I would like to discuss several very simple tips, tricks, and techniques that anybody can use to run a checkup of their stock portfolio to make sure everything is running as smoothly as possible and make sure there are no red flags.
Many investors, especially smaller investors, tend to create a stock portfolio and then forget about it. But an intelligent investor should always check on their portfolio as often as possible. The very minimum that you should be checking on your portfolio is once a year but once per quarter is even better.
The reason why you have to check on your portfolio is because even if you haven’t made any changes to the stocks themselves, sometimes certain things get out of whack on their own. Company management can change, there could be a lawsuit, your stock allocations may become overweight in certain areas accidentally, and on and on. Basically it’s just a good idea to check on your portfolio every once in a while and you should be looking out for certain things and that’s what I want talk about in this article today.
The first red flag to look out for is a portfolio with too many large-cap stocks. Many people are tempted to purchase lots of large-cap stock because they mistakenly think that large-cap companies are safer to invest in but any diversification strategy should keep the number of large-cap stocks down to a minimum level.
Another red flag is to be too invested in any one certain market sector. As investors we often set up certain allocations and sometimes these allocations can inadvertently get you invested more heavily in one sector then another. By sectors I mean things like the technology sector or the housing sector or the automobile sector etc. Be sure to check your portfolio to make sure you’re not stuck in one or two sectors.
Another red flag has to deal with mutual funds. Many investors simply invest in one or a number of mutual funds but from time to time the management of a specific mutual fund will change and this can be an enormous red flag that you should always watch out for. Luckily it’s quite easy keep an eye on this.
Finally an obvious and major red flag is if certain stocks in your portfolio have dramatically dropped in value since the last time you checked. Of course any decrease can be an anomaly and many times stocks go down and then jump back up again but if a stock in your portfolio has begun to consistently drop and shows no signs of increasing anytime soon, it may be time to sell that stock and reallocate into a different company.
So there you have several very simple tips that anybody can use to make sure their stock portfolio is running smoothly. I suggest you check your own portfolio every 3 to 4 months to make sure things are okay.
Rick Brunting runs a vacuum cleaner store web site where he also reviews the best bosch vacuum cleaner for your home. He has been an article writer online for well over 5 years and also enjoys fishing and basketball.
Tags: Checkup, Portfolio, Stock
View this post on my blog: http://stocktips.valuegov.com/how-to-do-a-stock-portfolio-checkup/
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