How To Build A Stock Portfolio
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By : JakeAmaral
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In today's guide we are going to show you how to build a stock portfolio on WeTradeHQ all for free.
Keep track of your current stocks, cryptocurrencies and many more all with the WeTradeHQ portfolio manager.
What is a good stock portfolio?
1 answer, Diversity. A good stock portfolio contains a balanced diet of many stocks in different sectors, this reduces risk and increases your future success to profitability. In addition you need to understand the companies you invest in, how they make money and their outlook for the future. However, depending on objectives and time horizon, what constitutes a good stock portfolio for one investor might not be so good for another investor. Although general rules of thumb do apply, there is no one-size-fits-all approach to portfolio management and construction.
Portfolio diversification, meaning picking a range of assets to minimize your risks while maximizing your potential returns, is a good rule of thumb. A good investment portfolio generally includes a range of blue chip and potential growth stocks, as well as other investments like bonds, index funds and bank accounts.
Portfolio construction is about selecting stocks that are most likely to meet your investment objectives. If you are nearing retirement and are seeking income, strong dividend-paying stocks might be suitable. These are usually so-called blue chip stocks that are unlikely to fluctuate widely in value and woo investors by paying a steady and predictable portion of profits back to shareholders.
However, if you're early in your career and it'll be a long time until you need to draw on your investments, it might be more appropriate to allocate your portfolio toward slightly riskier stocks that have more potential to grow over time. Technology stocks capitalizing on new markets and inventions are a classic example, but they're not the only types of growth stocks in the marketplace. Research using brokerage sites, the financial press and company literature to find businesses that you feel are set to take off.
Let's build our stock portfolio with WeTradeHQ.
We will keep it simple and add 3 safe stocks from different sectors thus diversifying our portfolio.
The 3 stocks we will add are Disney ($DIS), Microsoft ($MSFT) and Coca-Cola ($KO). You can add different stocks if you like we are just trying to keep it simple. All 3 stocks are in a different sector and pay dividends, this portfolio can withstand overall market losses in most cases however this is a basic example and do not take this as professional financial advice.
A dividend is the distribution of reward from a portion of the company's earnings and is paid to a class of its shareholders. Dividends are decided and managed by the company’s board of directors, though they must be approved by the shareholders through their voting rights. Dividends can be issued as cash payments, as shares of stock, or other property, though cash dividends are the most common
Disney is in the Mass media Entertainment industry and has a dividend yield is 1.24%. To calculate dividend yield, use the dividend yield formula. This can be done by dividing the annual dividend by the current stock price.
Microsoft is in the technology industry and has a dividend yield of 1.7%.
Coca-Cola is in the soft drink beverage industry and has a dividend yield of 3.41%.
Now that we got that out of the way, let's start.
First, search the stock ticker/symbol on the search box above. Let's start with Disney, either type the word Disney and it should be the first result or to be precise Disney's ticker symbol is DIS. Then press enter or select it.
Now press the green + plus button on the left, from here you can see that the share price is the current price of the stock although you can change it if you want. You can indicate if your going long on the stock or short, long meaning betting the stock is going to go up and short if your betting the stock is going to go down in value. You can leave the exit price blank unless you want to see how much profit you made if you made an exit at a specific price. The amount is the amount of shares, most people leave it at 1 but you can change it to a higher number if you plan on buying more shares and fees are optional, that is subtracted from your profit say from brokerage commissions.
Then press the check-mark button to add the stock to your portfolio, do the same for Microsoft and Coca-Cola by searching their names or tickers at the top, hitting the green + button and check-mark to add.
After you hit the check-mark button you will get a notifcation saying that the stock Disney has been added to your portfolio.
Click that notification to access your portfolio page, alternatively click My Portfolio under your username to access it as well.
Click Trade Executions and over time watch your portfolio grow! Remember prices will only update when the market is open, so if you add stocks after market close or on weekends they will not update until the next open.
We hoped you enjoyed this guide, feel free to leave a review above and tell your friends about WeTradeHQ.