How to Manage Your Financial Portfolio

Take Control of Your Portfolio

Are you new to the stock market or are you a veteran fearing how to manage your portfolio? Here are some helpful tips to keep a level head while taking control of your financial portfolio in today's market.

Things You'll Need

• Investment
• Patience
• Level Head

Instructions

1. 

   Stop and take a deep breath, hold.... and exhale. This will help slow your heart rate and your racing mind. There is a lot of information to consider with the stock market, but without thinking things through, you'll be more prone to make impulse decisions; which is exactly what you need to avoid.

2. 

   Take control. Some things you can control and some you can't; separate these so you don't become overwhelmed. You can't control if the Dow plunges or if a company whose shares you own cuts its dividend. Instead focus on the long-term health of your portfolio and what adjustments you should make.

3. 

   Always come back to the business. Just about all stocks are taking a beating, however not all businesses are facing the same risks. Look for mines in your portfolio. Regardless of the stock market's situation, there are normally two main reasons for corporate bankruptcies; an unprofitable business model and excessive debt.

4. 

   Make sense of your investments. Valuation matters, so review the stocks in your portfolio. Ask yourself if the current valuations of the stocks you own make sense given the company's earning power. Try ignoring the direction and size of stock price movements when doing this. If a great company whose shares you own has a price-to-earnings ratio of 10, you should ask yourself if that depressed valuation is likely to stay low long term. Then consider this question; "If I didn't own this stock today, would I want to buy it at it current price today?"

5. 

   Do not track your portfolio on an hourly basis. There is a ton of financial information available, but continually watching your portfolio is damaging to the kind of mind-set you need to adopt under these circumstances. Remain calm, focused, and you will make better decisions.

Resources

• How to Invest Your Roth IRA
• How to Invest Your 401k
• How to Calculate the Value of Your Savings Bond