If long-term wealth creation is your ultimate goal, then one of the best ways to achieve that is by constructing your very own stock portfolio. Without a proper portfolio, it is extremely hard to achieve your goals. That said, when building a portfolio, you can’t just include stocks randomly.
In fact, construction of a stock portfolio requires you to adopt a more methodical manner with carefully calculated moves. If you’re wondering how to make a stock portfolio, this article may just be able to help you out. Continue reading to find out how you can do it.
If you’re a beginner, here are some steps that you can follow to create your very own stock portfolio. But before you begin, make sure you have a free demat account. Without it, you won’t be able to invest in the stock market. If you don’t have one already, you could always open a free demat account through Motilal Oswal. That said, let’s now get to the main part of this article.
1. Know what your goals are
Before you even begin creating a stock portfolio, it is extremely essential to first identify your goals. This way, you will be in a better position to create one that’s perfect for you. Although your ultimate goal is to generate returns, you would have to identify other aspects such as the time frame within which you expect your goals to be satisfied and the amount of money that you’re willing to invest.
2. Pick fundamentally good stocks
Once you’ve identified your goals, the next step is to start picking the right stocks for your portfolio. When executing this step, make sure to focus on fundamentally strong companies. They’re the ones that are stable, less volatile, and more likely to generate stellar returns over the long-term. No matter how attractive a company may look from the outside, if it doesn’t back it up with strong financials and fundamentals, it is less likely to do well in the future.
3. Diversify your choices
There’s one thing that you should always keep in mind when picking stocks for your portfolio - diversification. Try to select stocks from multiple different sectors and industries. This way, you can reduce the risk of your portfolio underperforming during tough times. Concentrating on just one or two sectors increases the chances of your portfolio losing its value during periods of downturn.
Following these three steps diligently can help you create the perfect stock portfolio for yourself. Remember, if you don’t have a trading and demat account of your own, all you have to do is get in touch with Motilal Oswal. All it takes is a few minutes to open a demat account for free.
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