Start a Stock Portfolio from Zero
Welcome to one more exciting post, till now we had discussed the Important Rules, Mutual Funds, and ETFs, which are quite essential for the beginner to understand the markets but as we upscaling so we are quite eager to know about the stocks and the stock portfolio. In this Guide i am going to clear all the myths regarding an Ideal Portfolio. So lets start
In the markets, we should all have complete knowledge to make informed decisions and not be dependent on anyone. When investing your hard-earned money, you should be able to handle all market situations. So, we always have to start from zero and upscaling the knowledge we can build an empire same is applicable here .
It is said that ‘ FIRST YOU SHOULD PRAY FOR GODDESS SARASWATI THEN THE LAXMI ‘ as you upskill your knowledge then automatically your money grows.
IMPORTANT ELEMENTS IN THE PORTFOLIO
First Rule is to invest in Gold
Many people invest the entire capital in the Equity, while others invest only in gold; both are wrong. You can invest (85 to 90%) in Equity and (10 to 15%) in Gold. The allocation of gold in the prescribed percentage is very important, as it seems small, but it protects the portfolio from the Ups and Downs of the markets.
Second Rule is to lowering the Beta
See though you have a decent capital or a huge capital still you are not able to buy all the shares of the companies in listed in the several index. This is only possible via ETFs as we are able to buy all the companies (50 in case of NIFTY, 150 in case of MID-CAP, 250 in case of SMALL-CAP) so you had bought each and every company in the index so you are already diversified so ultimately your risk is very very low.
Avoid the PENNY STOCKS
PENNY STOCKS can lead you to huge losses in the markets so please avoid penny stocks,instead of buying a cheap, loss making company buy an expensive growth making company for consistent returns.
“INSTEAD OF BUYING THE DOZENS OF GLASS BUYING THE PORTION OF A DIAMOND IS VALUEABLE .”
Third Rule is to invest in Few Strong Stocks
It seems to be illogical but it is true the massive wealth is generated in the few number of stocks (most probably 8 to 10) are going to ber the multibagger for you and people are investing in several no. of stocks (ex. 40, 50 etc) see already you are in the trend of the companies via etf and by investing in many stocks is going to increase the risk and lowering the returns.
The biggest investor, Mr. Rakesh Jhunjhunwala, had generated exponential wealth from (8 to 10 stocks) only if the person had followed this rule; then we all are just beginners, so why not? So you can invest in a maximum 15 to 20 stocks and always add more quantities to the hero stock of the portfolio.
Fourth Rule is to invest in those companies that Businesses you know
See, we are humans and we have limited knowledge some are Value Investor, while some are Momentum Investors end of the day both want to earn money; only the style of investing is different. So know yourself if you are high-risk takers, then you are a Value Investor, and if not, then you are a Momentum Investor.
Fifth Rule is to Follow your Setup
Stick to your rules and your setup strictly as it develops the discipline inside yourself, and the disciplined person is appreciated in the markets.
If you decide your entry and exits, then take the relevant actions at the time to remain a horse of a long race in the markets.
Ideal Portfolio
The blend of all the above factors is the Ideal portfolio, but still it varies as per the risk ability
Low Risk
- Gold ETf
- Nifty 50 Etf
- Large Cap Stocks (Blue Chip Stocks)
Moderate Risk
- Gold ETf
- Nifty MID-CAP Etf
- Large-cap stocks
High Risk
- Gold Etf
- Nifty MID and SMALL-CAP Etf
- Flexi-cap stocks (Blend of all the large, mid, small-cap stocks)
Thus, starting from zero, we can create exponential wealth.
See you in the next part
Till then STAY HUNGRY STAY BULLISH
