How To Build A Profitable Stock Market Portfolio? BoursePanel

Rodrigo26 September 2022 >> Home >> Stock Picks >> How To Build A Profitable Stock Market Portfolio? BoursePanel

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When building your stock market portfolio, it is crucial to have specific goals in mind. These goals will lead to the right decision-making. You should also avoid the sunk cost fallacy, which is the tendency to hold on to investments past their rational value. It is a major mistake that can cause significant losses.

Stock Diversification

Investing in unique assets, such as stocks and bonds, can help mitigate the risk of a particular stock or currency going down. It would help if you diversified your portfolio by using various investment vehicles, such as exchange-traded funds and mutual funds, which hold shares of several companies. You can also use target date funds, which shift your asset allocation away from stocks as your target date approaches.

The primary benefit of diversification is that it limits the impact of volatility on your portfolio. Boursepanel recommends or designs a stock market portfolio by diversifying the investment into different sectors. The platform distributes the investment based on the market cap and looks at the individual weightage of stock in the portfolio.

Stock Diversification

Growth stocks

Growth stocks may be a brilliant choice if you’re looking to increase the value of your stock portfolio. Growth stocks are companies with plenty of room for capital appreciation. They are also often in a rapidly growing sector. The downside is that they may not have earnings yet, but you should not discount them.

Growth stocks offer more growth potential than value stocks but can also be more volatile. This investing requires a long-term mindset, so investors should remember that they can also lose money. But using growth stocks correctly can bring dramatic returns.

Boursepanel Expert picks feature offers a dedicated growth stocks list. The platform scans the market and finds the right growth stock for you. Learn More about using Boursepanel Expert Picks Feature.

Growth stocks

Mid-cap stocks

There are a few things to consider for determining which stocks to include in your stock portfolio. The first factor is how much the company is worth. If the stock is priced higher than its value, it might be an excellent investment for a long-term strategy. Similarly, if priced lower, it could be an excellent investment for a short-term strategy.

Another essential factor to consider when investing in mid-cap stocks is the company’s quality. Investing in mid-caps may not be for everyone, but it is a great way to diversify your portfolio and make it more attractive to you. You can invest in individual stocks or invest through exchange-traded funds. Either way, you will need to know how much risk you can handle.

Note: Boursepanel platform categories the recommended stocks based on mega, large, and mid-caps.

Mid-cap stocks

Speculative stocks

A proper stock portfolio should have at least ten stocks in different companies. It will allow the investor to spread the risk over various sectors and companies and keep their portfolio growing steadily, irrespective of market conditions. Speculative stocks have high valuations but are often associated with high risks. Depending on your risk tolerance, you may choose to own shares in a few speculative companies.

Speculative stocks are relatively risky but can also offer high returns if done correctly. However, because of their high volatility, most long-term investors and institutional investors avoid speculative stocks. Speculative stocks are typically new companies, startups, and companies with high-risk profiles.

Defensive stocks

Defensive stocks are excellent investments for a stock portfolio because they perform well even during times of economic crisis. These stocks are in steady-demand sectors, such as food and beverages, utilities, and healthcare services. Their peers often undervalue them and hold their value well through periods of decline.

Investors who choose these stocks will usually take a “buy and hold” approach. They can, however, open long positions if they think the stock will increase in value. However, they must consider risk-management controls during periods of economic downturn. For example, they should stay up-to-date with the news to understand how the economy is faring and what might open positions and sectors.

Boursepanel is an advanced stock market research and analysis platform. It offers portfolio management tools, including stock trade signals, with an accuracy rate of almost 80%. There are different model portfolios for stock investors to replicate such as Warren Buffet’s portfolio, and Rakesh jhunjhunwala portfolio. Currently, you can build the US, UK, Indian, Qatar, and Saudi Market Porfolios. Click to sign up for a free 10-day trial.

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