Exchange: insider or beginners, here are 12 tips for managing your portfolio
For all: Establish your profile
Before you start, set your investor profile. If your stock knowledge is rather limited, stand-by to a few basic techniques. And simple tools such as shares or trackers on the major indices. If you have experience, you can vary strategies and handle sophisticated tools such as warrants.
For beginners: Set the amount of risk
If your investor profile is careful, you’ll probably choose safe values with limited volatility. Remember, however, to devote a minority share of your portfolio to smaller growth stocks, riskier but offering higher earnings prospects. Or to more aggressive sectoral or geographical paris. In case of falling equity markets, the least risky compartment will serve as cushion to absorb the shock. In market terms, as in property matters, the question is not whether or not to take risks. The answer is always yes. Only remains to find out how …
For beginners: Invest gradually
Can not buy on the market at the highest out just before a bubble bursts. Attempting to engage in the practice, individuals historically come into stock when the market has gone up, frustrated not to have benefited from rising to leave disgusted just after a collapse. The right solution to start? Investing gradually. Certainly, the gain will be less if the bull market, but the collapse will be more limited when it drops. Demonstration: an investor who invested 12,000 euros on the CAC 40, June 30, 2008, ended up a year later with 8497 euros. If he had put the same amount, at 1 000 each month over the period, he would have ended up with 11,550 euros in total. Therefore advised to go to Exchange: you made an investment program for a year with, for example, to integrate a new value every month.
For all: Control your investment universe
The number of securities listed on the Stock Exchange in the hundreds for single actions. So many good deals to be had, do you think. A wrong! Instead of trying to track down all the right moves, it is better to focus on a limited area of securities. Example: only the following values of the major French CAC 40, you will be able to analyze the results of publications and look at the evolution of their courses. You can then integrate the portfolio at the right time instead of rushing about unknown values under the pretext of having had a “hot tip”!
For all: Do you require a minimum of diversification
All sectors does not depend on the same variables: interest rates for financial, commodity prices for industrial … Titles like as construction are sensitive to the economic downturn. Those of pharmacy and distribution less. It is therefore appropriate to mix cyclicals and defensives. Once its diversified portfolio, we must monitor the balance as some securities value. The goal should not gain too much weight overall. When you started, your portfolio will not be diversified for a while if you follow our advice 2. But after a year, it should not be the case!
For insiders: Limit the number of lines
Unless you have a lot of time and make the Exchange passion, it seems unreasonable to claim monitor twenty smaller companies. Not to mention that the multiplication of lines grows custody fees charged by the bank on your behalf. If you want to generate the performance, we must diversify without making the dusting in your wallet. In practice, the individual has greater flexibility than the managers, subject to certain constraints by the AMF. Our recommendation to remain the most reactive possible financial information: better manage a portfolio of ten to fifteen titles, with no value exceeding 20% of the total.
Beginners: Make sure the liquidity of securities
As professionals, be sure to consider the liquidity of the securities prior to purchase. Liquidity is measured either by number of shares traded on average per day, amount of capital. At purchase, you may overpay an illiquid stock, especially if you do not spend limit orders. If the amount of your order is important in a thin market, you run the risk of shifting the rising market. Conversely, resale, you will have all the trouble to separate you from an illiquid security if you need money. Except to accept the rush?
For all: Look to the future, not the past
Focus on the cost price or the level of courses, compared to earlier, is looking at the past. Now imagine, for example, financial stocks meet tomorrow their previous valuations is likely to be costly error. These are, indeed, growth expectations of the benefits that make the stock route. It is better to separate titles to disappointing fundamental outlook, as those purchased too expensive. Buy or keep values should depend only on the answer to this question: what are the prospects?
For all: Be disciplined
In exchange, it is better to set rules. With each purchase, always set the two main reasons for your choice. Next, do not get attached to securities held. For this, the sell discipline is as important as the price of purchase. Set a goal from the start and stick to that limit. Then let hang a sell order corresponding to that level. Similarly, review systematically review the titles when the reasons for purchase are no longer valid. Finally, compel you to make a regular on your wallet to follow the news titles and validate the interest to keep them. In addition, if a stock has soared and is weigh more than 20% of your portfolio, please: take a portion of your profits.
For all: Avoid having the move
The high turnover of a portfolio is useless. It is better to identify companies with strong potential for longevity, able to withstand long term. This principle has made the fortune of billionaire Warren Buffet. Should be monitored earnings growth over time and integrate only the best values. For the individual, the cost of unwanted rotations strike performance. And the portfolio is smaller, costs related to brokerage sales-purchases are high.
For all: Think PEA
The best tax envelope to invest in shares? The stock savings plan (PEA). Powered maximum 132 000 payments, this plan has a securities account and a corresponding cash account. All gains escape taxation on capital gains when the owner makes no withdrawals of cash or securities in the first five years. Only social contributions are due at closing. All French and European equities are eligible. For comparison, on an ordinary securities account capital gains are taxed from the first euro at progressive rates of income tax at a rate of up to 45% plus 15.5% social contributions. Rebates are however applicable depending on the holding period of the shares. Same fate for dividends that support progressive taxation after applying a deduction at source without full discharge of 21%. In addition, a 40% reduction is performed on these dividends before taxation.
For insiders: Play with leverage
Take advantage of the leverage effect, keeping in mind the risks involved. With deferred settlement, the maximum leverage is 5. The risk is limited to twice the initial investment. But it is possible to do more with more complex tools. The warrants and turbos and achieve a lever located between 20 and 50. Finally, attention to the latest These products include contracts for difference or CFDs. If they require a deposit, you can lose more than your original bet. CFD must therefore be constant attention and are only for very savvy savers.