Q 1
Investing in stocks is never an easy job. As an investor, it is crucial to think of multiple ways to grow the money without losing any bit of it. The most excellent strategy to generate a significant amount of wealth is through having a well-established long-term investment plan. Informed investors who have a deeper understanding of the business have the upper hand in growing their earnings with the constantly changing market dynamics compared to the uninformed ones.
As an uninformed trader, there are various strategies that I would apply to avoid losing money to the informed counterparts. First, I would consider buying stocks based on their fundamentals rather than on their past performance. In this case, I would compare the stocks based on the price-to-earnings parameters to have a fair idea of the stock price on a relative basis. Secondly, I would evaluate my portfolio regularly and set my holdings according to my established exit points. Lastly, I would invest in various stocks to minimize the volatility and secure the portfolio from unprecedented market shifts.
Delegate your assignment to our experts and they will do the rest.
Q 2
The article titled, Investment Portfolio: What it is and how to build a good one, gives detailed insights into creating a less complicated yet effective investment portfolio. The article acknowledges how intimidating creating an effective investment portfolio can be. According to the article, one of the most crucial factors to consider while creating an investment portfolio is risk tolerance (Benson et al., 2021). Risk tolerance is the ability of a trader to give in to losses in the process of investing in exchange for a probability of winning higher investment returns.
The article's first tip on building an effective investment portfolio is deciding how much help one needs. The help can be in the form of finances or input from Robo advisors (Benson et al., 2021). Furthermore, one can also select an account that aligns with their goals. Thirdly, an individual can choose their investment based on their risk tolerance. Lastly, investors can determine the most suitable asset location for them. The article's strategies might work because they are based on risk tolerance, which is a crucial investment factor that boosts the odds of establishing a long-term investment plan.
Reference
Benson, A. and Jackson, A. (2021). Investment Portfolio: What It Is and How to Build a Good One - NerdWallet . [online] NerdWallet. Available at: <https://www.nerdwallet.com/article/investing/investment-portfolio>
