There are different stages in life during which an investor would like to start a portfolio. Whether the trigger is having a lump sum, moving from an advisor to being alone, wanting to put money aside for kids’ tuition, or just getting started in the investment world, the process remains the same. Here’s how to build a portfolio in five simple steps!
You’ll Learn
- We often feel that the first step is done in a rush or is at least underestimated by many investors. We are so excited to start buying stock that we must remember the backstage work. Why is it important to determine the strategy that best applies to us first?
- Which questions should we ask ourselves to know which strategy we’d like to pursue?
- In our case, we chose dividend growth investing, focusing on the dividend triangle. What does it consist of?
- The second step is stock selection, which starts by identifying 3-4 companies in each sector that fit your strategy and show a good dividend triangle.
- Is it mandatory to hold equities in each sector or can you skip some?
- In step 3, we ensure that the best assets are selected. To achieve that, you compare these companies sector by sector to keep only 1 or 2 for each. At dividendstocksrock.com, we have a stock comparison tool and stock cards that make this step much easier. But for those who’d do it by hand, what should they look at?
- This leads us to about 20 dividend growth stocks on our buy list. Before pulling the trigger, there is step number 4, which consists of building a mock portfolio. This way, investors can have a good overview of their future portfolio. What should they bring their attention to?
- The last step is to get on the stock market and buy! Many investors wonder which is the best: buying everything all at once or waiting in between?
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Insights into Military & Aerospace and Banks – Subsectors Series [Podcast]
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