Having a portfolio of assets in trading (individual investment) is a mandatory thing that must be done if we want to become investors or traders. Always learn a lot and practice accurate strategies so that investments generate maximum profit. The trading portfolio means the arrangement of assets that we have. When investing we are required to have several different assets (diversification). But of course we must not be arbitrary in choosing the assets we are going to buy. This is where we need to learn the strategy of building a good asset portfolio. Apart from consistent profit goals, it certainly has minimalist risk. This will make our trading psychological well maintained.
Every trader / investor always diversifies his assets, of course, this is a strategy to cover possible losses on one or several other assets and take profits on one or several other assets. If we are traders, risk management such as cut loss must always be disciplined.
I have taken the steps to build an asset portfolio, I have done some of these steps myself, and indeed the disciplines are mandatory to be fulfilled even though we often get stuck in "feelings"
• Determine the investment period and objectives
Why are goals and timeframe important? Because investment will be more ideal and structured if we have definite goals, what is this investment for, what are our goals in the next few years, etc. For example, to own a house, a child's education fund, a pension, go on a trip to a dream place, etc. The simple formula is "There is a definite goal there is an effort to achieve it".
Short term investment is known as trading, and long term investment is known as investors. The benefits of trading may be far less than long-term investments (but it is possible to be the opposite), but if you want to reach your targets and goals quickly, daily trading or swing trading can be the right choice.
What is YOur Investor Profile?
Conservative, moderate, or aggressive?
If we prefer to be calm investors, and prefer to be safe. Usually we will avoid high risk, or we choose medium risk, in this case we can be called conservative or moderate investors. But if we are the type of enthusiastic investor, do not hesitate to invest a large amount of capital to achieve the highest profit. The more capital the greater the profit but also the greater the risk. This means we must be ready to lose, must be prepared to lose capital.
This is a natural thing that is in accordance with the personal character of each. The investor profile will be a factor that influences the contents of our portfolio of assets. Moderate and conservative investors tend to avoid high risks, for example, we will prefer assets whose prices look stable. And an aggressive type of investor will choose to buy an asset whose initial price is low, but they believe that one day the price can go up and bring multiple profits or returns.
• Adjusting the capital.
Today, investing can be started with a small capital, and of course it can still generate profits. Moreover, if we have a large enough capital, you can guess for yourself, the returns will also be greater. But of course you must still allocate capital carefully. When you first start investing, it's better to do it slowly with a small capital first to adapt, then step by step adding capital.
Different investors are different traders, a trader is better off using capital for transactions not more than 30% of the total capital. Because trading activities are quite high risk with asset prices that fluctuate significantly every day. For that we need a beautiful playing strategy.
• Balance of risk and return.
Balance between risk and return, for asset ownership of more than one type. For example, choosing an asset whose price is stable is combined with assets that have the potential for future price increases in accordance with the fundamental project of these assets.
For example, if one asset experiences a loss, it will be covered by the gain profit for other assets. That way portfolio stability will still be achieved, no matter how smart a trader or investor is, of course they will never always experience profit, there are times when they must lose, because real market conditions cannot be predicted with certainty.
• Investment diversification
In order for the portfolio to look even better, there is nothing wrong with diversifying your investment. For example, investment property that can be leased for passive income, there is gold investment to keep the rate of inflation, bonds with much higher interest than deposits. There are cryptocurrencies that are also a pro investment option good projects offered, and of course will increase the price as well in the future. Investment in stocks, apart from helping the country's economy, is also an alternative for long-term high returns. The objective of the diversification strategy is to reduce investment risk (loss).
A neatly built portfolio, not carelessly and carefully calculated will be more promising going forward, achieving a balance between risk and return. To build a neat portfolio cannot be done briefly, but it takes time, a level of knowledge, experience and sufficient capital.[]
