Stock portfolio

Stock portfolio is a very strong professional stock trading tool if managed in proper and effective way gives you high and high returns in stock market by any other mean is not that quite possible. Stock portfolio provides you an additional security and decreases your risk appetite in significant way in stock market.

Stock portfolio is a mixture of any number of stocks mostly preferable for small stock market investor or stock market trader is 10 to 15 numbers. Stock market traders prefer to have 10 to 15 numbers of best stock collections in their favorite stock portfolio which helps them to execute stock trading almost on daily basis. It always does not happened that day traders are able to conduct their day trading in only one specific stock on daily basis because they know that only one stock cannot give them a perfect entry point on daily basis to conduct day trading so to overcome this issues they prefers to have 10 to 15 stocks or more which helps them to give chance to enter in any 2-3 stocks for day trading on daily basis.

Professional stock market investors also prefer to maintain 5 to 10 numbers or a bit more of best stocks in their stock portfolio. By investing money not only in one stock but diverting the money in mixture of stock gives them an additional security and reduces their risk appetite. The stock portfolio consists of mixture of stocks such as large cap, mid cap, highly volatile stock, highly defensive stock, highly liquid stock, very less affected by external factor stock, etc. The stock investor prefers to maintain portfolio as per their investment horizon and amount of money they want to invest in their best stocks.

Now you might be thinking about how the stock portfolio will give high return and will reduce risk?
As it is know the stock trading or stock investing is a risky factor to make money. No doubt that if your stock pick selection is perfect from all angle chances are evergreen that you will make handsome of money, but still it is having said that there is still risk associated in it, because the external factors which might impact your stock pick is not in your hand and nor you can imagine it, which might cause the stock dump.
The external factors might consist of
• interest rate.
• crude oil dependence
• government policies
• natural disaster, and many more
which might negatively influence the specific stock pick you are holding, so to overcome this issue you need to make stock trading or stock investing in more than 2 to 3 stocks of different categories as mentioned above which will help you to trim down your risk associated only in one stock.

The stock portfolio is only established after a strong stock research which you want to include in your portfolio. Stock research includes the fundamental as well as technical study which gives a correct view about the overall performance of your favorite stock pick. The some of the categories in stock portfolio but not limited to are:

Large Caps
• Large cap stocks are stock with market capitalization of more than $5 billion such as IBM, Microsoft, Wal-Mart, etc
• You need to keep these types of stock in your stock portfolio because these stocks are consistently out performer in their whole history and will remain out performer in future also
• This stock has a deep market penetration, endurance and solid business management background and has a capacity to cope with any unsuitable condition.
• These stocks make consistent good innovative changes in their product which gives you an assurance and faith that you money is always safe and will give you high returns.

Mid Caps
Mid cap stocks are stock with market capitalization between $1 billion to $5 billion.
• There is slight risk as compared to large caps in doing stock trading or stock investment in these stocks because mid caps stocks does not always give that much of consistent performance as compared to large caps.
• Also there is lot of competition in mid cap companies which might impact their profit margin in significant way along with inconsistent market base
• But still if your have done strong stock research and have pick out a good mid cap stock which might sustain at any unsuitable condition and has a capacity to become a large caps in coming years then you have a very good potential to make good money in coming days.
• The advantage of investing your money in mid cap is that the mid cap stocks has a big room to become a large caps which will increase it market capitalization giving you high stock price return along with other benefits.

Small Caps
Small cap stocks are highly risky stocks and are also called as penny stocks.
• There is sudden inflow and sudden outflow of funds from these stocks which makes these stocks more vulnerable.
• If at any point any uncertain situation arise in the stock market, these small caps penny stocks are the first which are hammered significantly, but also if there is any strong rally in stock market, these stocks have a big potential to go high giving you high returns.

So to increase your efficiency and to maintain consistent profit from stock market you need to be more specific in selecting your stock portfolio. Consuming mixture of stock pick of different categories and of different business aspect will end up giving you consistent money at low risk.