Top Portfolio Management Tips

The earlier you start investing, the better — but it’s never too late to start. Some people delay investing in the stock market because they don’t understand exactly how it works, or how to achieve their goals. Managing a portfolio is not magic, but it does require a level head and a commitment to the process. When you dedicate the time to learn about different investment strategies, challenges, benefits and results, you can create a passive income stream that can help support you for the rest of your life.

We’ve put together some tips to get started with managing your own investments. Self-managing brings its own set of challenges, and it’s not for everyone. Snider Advisors offers helpful investment portfolio advice, tested strategies like the Snider Method, and experienced guidance to tailor your investment strategy to match your comfort level. If you want to do it yourself, we’ll help you take charge of your investments and work toward achieving your long-term financial goals.

Set Your Goals

Managing a portfolio yourself means setting specific financial goals and understanding your timeline. Are you looking for supplemental income post-retirement? Do you want to create funds for family members who need lump sums for large purchases throughout their lives? How many years away is retirement? Be honest with yourself about how much time you have to participate as an active investor.

Find Your Risk Tolerance Level

Think about how much risk is comfortable for you to take on. Those who begin investing at a younger age may not have the heavy financial commitments that come later in life, such as a family or a house with a mortgage, and thus can participate in higher-risk, potentially higher-reward investment strategies. Those starting in mid-life or later will likely need to invest more conservatively for steady, more stable growth. If you’re unsure how to evaluate your risk to align with your goals, you can always talk with an expert to get more informed investment portfolio advice.

Get The Right Mix

Everyone knows diversification is important, but understanding optimal asset allocation is important if you want to build that cash flow to hit your goals. Here are some general stock portfolio tips to get you started on understanding the optimal mix:

  • Understand the assets you choose. Never invest in something you don’t understand.
  • Aim for a mix of conservative stocks (long-term growth) with a smaller percentage invested into stocks that are higher risk with potentially better returns.
  • Measure worth by performance over time, not by the price of the stock. 
  • Use caution when estimating growth rates; be conservative.
  • Don’t put too much into a single, individual stock.
  • Price declines can be an opportunity to increase your portfolio instead of bad news.
  • Diversification is extremely important for long-term gains.
  • Proper Diversification means you will have good and poor performing assets at the same time.  Don’t get hung up on just the poor investments.  Judge results based on the entire portfolio.

Focus on Cash Flow Investing

Cash flow investing is an ideal goal for retirees living off their investments.   This is investing into an asset and using it to generate a consistent income while holding it.  Many investors take a capital appreciation mindset which requires an asset to appreciate in price in order to benefit.  Cash flow investing means you buy a certain type of asset specifically for its ability to continuously generate income, such as a piece of real estate with regular income from renters or a  business with income from operations.Transitioning this mind set to stocks by incorporating covered calls in your portfolio, cash flow investing can capitalize on volatility in the market, creating value in both up and down market scenarios, and creating more monthly income. More monthly income means a better retirement.

Focus on the Long Term

You should set goals for long-term success and work to understand what activities support and detract from those goals. For example, it can be helpful to understand how frequent trading can detract from your gains due to commissions and other fees. Or it can mean knowing how to take advantage of catch-up contributions available to people over 50 so you can build wealth for retirement years more quickly.

Have Support

While you can save fees with self-management, you need to balance that with an understanding of the time commitment, technology and other personal challenges involved with managing a portfolio. Armed with a smart strategy, a level head and reasonable goals, managing a portfolio yourself is definitely possible. That being said, even experienced investors have trusted contacts to call upon for stock portfolio tips, or for advice at different stages of the investment journey. Snider Advisors is here to provide valuable investment portfolio advice and help you understand all the challenges and benefits to self-management.