How to Build a Stock Portfolio to meet your Financial Goals?

You invest to meet your financial goals; earning high returns helps you achieve them faster. But you need to remember that your goal is the ‘dog’, and high returns are the ‘tail’. And as the saying goes, you must not let the tail wag the dog. Far too often people forget this, and chase higher returns without paying heed to risks. Investing is all about the future, and the future is always uncertain. This means you are always exposed to risk. You cannot eliminate risk, but you can and must manage it.

How do you manage risk in investing?

Discipline and Diversification are two effective tools that help you do this. Luckily, both are free, but this does not mean investors use them well. We have seen a large number of portfolios, and it’s obvious that most of us, and by that we mean almost all of us, could do better on both these fronts.

Discipline prevents you from letting your emotions drive your investment decisions

But discipline to do what? Discipline to follow a framework of decision-making; what to buy, at what price to buy, etc. Our entire site is built on a framework of fundamental investing; it is governed by a strong process. This does not mean that it will work wonders all the time, but following the process consistently is essential to meet your financial goals through investing, and also to earn high returns.

Diversification answers the question: ‘How much of each stock should you own?’

It...........Read More

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