Creating your Stocks Monitoring Portfolio


Stocks Portfolio for Monitoring

Say you are new to stocks market or you decide to trade a different stock market.

Here’s some quick and easy steps:

1. Buy a copy of newspaper with stocks section

2. Circle the companies that you know

3. Choose 5 sectors where you have the most stocks selected 

You will want to have a good mixture of defensive and cyclical sectors. For a start, a portfolio with a mixture of say 1 defensive and 4 cyclical or 2 defensive and 3 cyclical will be good. This will give you a feel of how the stocks react during different periods of the year and how each sector reacts to different market news. As different sectors perform differently, a mixture of sectors opens up more trading opportunities throughout the year.

Defensive sectors:

  • Utilities
  • Consumer Staples

Cyclical Sectors

  • Basic Materials
  • Capital Goods
  • Communications
  • Consumer Cyclical
  • Energy
  • Financial
  • Health Care
  • Technology
  • Transportation

4. Have at least 3 stocks in each sector

This gives you a huge advantage. These stocks can work as an index for the sector to tell you how the sector is performing as a whole, they can also be used to generate some trading strategies when you identify a mispricing for one of the stocks when the stock price moves differently against the rest, or you can pick the best alpha stock among the rest to trade.

5. Use a stock screener to pick some good stocks

If you do not have enough stocks to make up the 5 sectors, use the stocks screener available on Finviz.com, Google Finance or Yahoo Fiance and apply the Fundamental Analysis guides to choose some good stocks.

So here you go, a good stocks portfolio with a healthy 15 stocks with multiple sectors. And it will expand along they way. You can refine your stocks portfolio as you get exposed to more stocks information in the news or analyst reports. You may possibly also remove some if you find them not suiting our trading style.

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Monitoring your stocks

You may be using a charting tool from your broker, or a paid charting software. Add these stocks to your list so that you can view the charts on a daily basis. If you are not using any of the above, don’t worry because there is a good free tool available. Personally, I like the tool from Yahoo Finance as there is an option to display all the charts, providing a quick way to glance through all the stocks in your portfolio.

Here’s how it looks like on Yahoo Finance if you choose the “Detailed” view.

Portfolio Sample

 

Well this picture shows how the stocks charts look like on the website. It’s just for illustration. However, you can make it even better.

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Making your portfolio more organized

First, have your market index as the first item. It can be Dow Jones, Nasdaq, S&P500, DAX, Hang Seng, Nikkie 225. You may want to add in other country’s stock index as well to monitor their movements.

Second, add in a sector index if there is.

Third, add in your 3 stocks in the same sector.

Repeat for each sector.

And here you go, a beautiful overview of all your stocks portfolio in once glance from the overall market, to the sector, to the individual stocks.

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