How to Easily Manage a Successful Stock Portfolio
As a millennial, retirement is not something we usually think about, let alone terms like stock portfolios or 401(k). We are living in the here and now not the then and future. However, the future is something that we should start planning towards, and we can take the necessary steps today! Here are a few tips to efficiently manage a successful stock portfolio and set yourself up for a successful future. Please note that I am not a licensed professional and this article is for informational purposes only, not recommendations. There is no one size fits all when it comes to investing as everyone has a unique financial situation and risk tolerance.
As soon as you get a big kid job out of college that offers a 401(k) plan, take advantage of it! This will take small portions of your paycheck each month and save it for you while accumulating interest. If your job does not offer a 401 (k), you could create an Individual Retirement Account (IRA) which you deposit money into each month. It is highly encouraged to start when you are young because you are less likely to have burdensome financial obligations and will create a nice nest egg for yourself (Investopedia). Some would suggest that you put 90% of your retirement money into stocks because, by the time of retirement, you will have quite a large amount (CNBC). It is important to remember though that you must leave the beautiful nest egg alone and not make unnecessary withdrawals so that it can continue to grow!
Mix it Up
Diversify your portfolio by investing in stocks over a variety of categories. If you choose to invest in individual stocks, don’t put more than 4% of your total portfolio into one particular company (Investopedia). You don’t want to put all of your money into one ship because if that ships tanks, so does your money. Try to choose stocks that you have an interest in because in order to stay on top of your investments, you need to keep a close eye on them (Huffington Post). You don’t want to pick a business that bores you.
Stocks for the Anxious
If you fear the risky side of stock buying, then choose the mutual fund route! This places your share within hundreds of other companies rather than an individual company. This will alleviate some of the risk and nerves if the single stock is to suffer. With a mutual fund, if the stock is to suffer, you will not have a total loss because your share is still invested in many other companies (Business Insider). This is a good strategy for beginners because you can see the process of businesses thriving and failing before jumping into the world of individual investments.
Buy low, sell high
Think of this as going to a garage sale and finding an old sofa. You take it home, clean it up, remove that awful smell and then resale it for a higher price. You can do the same with a stock. Invest in a stock that is cheap and then sells it when it is in high demand. So business wise, a good time to buy is when the stock is when it is 10% or below, and then sell it when it is 25% or higher (RothIRA). If you worry easily, you should avoid stocks that ranges in the polls often such as new start-up companies. The safest bets are stocks that “are ‘diseased’ but ‘curable’” such as Apple in 2000 ($26 a share) which then turned into Apple 2012 ($456 a share) (RothIRA).
The stock you invest in may often fluctuate, especially if it is a start-up business. Try to remain calm! This is seen to be normal and tends to happen often. While some suggest you do not put more than 4% into an individual stock, others suggest to millennials to put as much as 10% or more in emerging markets and should be divvied up among U.S and international equities (CNBC). Avani Ramnani, director of financial planning and investment at Francis Financial states that when investing is done at such a young age, there is plenty of time to “deal with the ups and downs of the stock market and time to recover from the downs, so definitely be aggressive” (CNBC).
Utilize some important apps
Make usage of that smart phone! There are many great apps that help you keep watch on your investments and push you to build further that nest egg. The first is already on your phone (for Apple users); the Stocks App typically found on the home page. You can customize it to look at only the stocks you have an interest in.
There is also the Betterment app which invests money for you over a range of stocks and bonds that mirror your investment goals such as building wealth or creating a safety net (US NEWS). There is no minimum investment and it’s easy!
Another app is Acorns which takes the spare change of you credit and debit card purchases and rounds it to the nearest dollar and then invests it in 6 different funds based on your risk tolerance (US NEWS). It’s like the digital form of your mom taking the change from your pockets before doing the laundry and making it into lots of money. Thanks, Momma Acorns!
With social media feel, Openfolio is an app designed to manage your portfolio and link you with people you know and trust for investment strategies. Your portfolio is shared regarding percentage allocations, not actual dollar amounts (US NEWS). This app has the capability to connect with Twitter and Facebook!
If you are managing your successful stock portfolio all on your own, Rebalance IRA is perfect for helping you. While this is not an app, this website helps to save clients an average of 45% to 72% in annual fees on retirement investments. They even offer one-to-one consultations.
So get started now on building up your beautiful nest egg because the future is right around the corner and you want to be ready for it!
Check out these other articles that mention ways to a successful stock portfolios: Investing for Beginners and Can You Really Afford to Spend Your Money?
References: Investopedia, CNBC, Huffington Post, Business Insider, RothIRA, US NEWS, Rebalance IRA
Have any helpful tips on how to manage a successful portfolio? Let us know in the comments!
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Great advice, thankfully my husband is a CPA and takes care of all these things for us.
Oh how lovely to have a husband that is a CPA!
It’s very smart to begin investing young, and when you are young, you are able to tolerate more risk in your portfolio. Believe me, retirement comes FAST and you wonder where the years went. We are ok, but I, myself, wish I had started investing even a tiny amount at age 21~!
Writing this article made me realize that I need to start planning for the future and now is the best time. Thanks for the comment!
Ok now I need to start NOW! Very motivating to get yourself together and start a portfolio. Sounds like a sound plan
I am currently working on moving my 403b and pension into a single Roth IRA. I have not gotten very far due to life interfering.
i wish i had known all this stuff when i was first starting out in the workforce!
Buy low, sell high should be common sense, but so many people still do not get this point. You have to manage your portfolio the right way.
I really need to start investing, didn’t have clue where to start!
I think the biggest thing is to just start. I buy and hold my investments. It’s so important to invest early too!
This is the wonderful tips to manage stock portfolio. Investing is really a need.
I really dont have any thing related to stock, but I am curious to step in & invest something on it. These tips sound really helpful & could be a wonderful guide for people like me.
Thanks for providing very clear advice. I like to mix things up as well and it has worked better for me.
I’ll check back on your post later, but I was unable to read it now because the email pop-up message on your site won’t close out and is covering most of the screen. Just wanted to let you know! It might just be my computer being goofy 🙂
I will be honest and say even though my company offers stock options I was still clueless and probably need to read into it more. Thanks for this informative post, its always good to start thinking about what you will have when you retire.