We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Managing beta, staying updated, and letting winners run are key.
Keeping your portfolio in shape is undoubtedly challenging, as the investment landscape evolves rapidly.
But the task can be more straightforward than some believe, as investors just need to show some initiative. For those looking to keep their portfolios in shape, here are a few pointers.
Weathering Volatility
Beta is a measure of a stock's systematic risk, or volatility, relative to the overall market. The S&P 500 is often used as the benchmark, with a beta of 1.0 representing the market average.
A beta greater than 1.0 indicates that a stock is more volatile than the market, while a beta less than 1.0 suggests the opposite. Essentially, low-beta stocks provide a higher level of ‘defense,’ whereas high-beta stocks are known for their higher returns, or ‘offense.’
Investors can use beta to help balance out their risk profile, helping during intense volatility spikes. A classic example of a low-beta stock is Coca-Cola (KO - Free Report) .
Staying Updated
Regularly reviewing earnings reports and news releases is crucial for staying informed as an investor. These reports provide a wealth of information, including revenues, expenses, and profits. By keeping up with this data, you gain a deeper understanding of the business and can spot any potential ‘red flags.’
In addition, quarterly reports and news releases provide deeper insights into a company's strategy and plans. For example, the report may detail new products or services planned for launch or discuss plans to tap new markets.
By understanding a company's strategy, investors can more easily evaluate its long-term growth potential. Nvidia’s (NVDA - Free Report) quarterly releases have been a great example of why investors can’t fall asleep behind the wheel.
Let Winners Run
The "Let Winners Run" and "Cut Losers" strategy is simple: Investors should hold onto stocks that are performing well to benefit from their continued growth and compounding returns while selling underperforming stocks to prevent further downside.
Of course, selling losers also frees up capital for better opportunities. The approach helps provide a portfolio that grows steadily over time by leveraging the strengths of successful stocks while minimizing the impact of the ‘bad apples.’
Bottom Line
Keeping a portfolio in shape can be challenging, but it’s certainly not as difficult when implementing some guardrails.
Managing volatility, staying up to date, and letting winners run are all recipes for portfolio success.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Tips to Keep Your Stock Portfolio in Shape
Key Takeaways
Keeping your portfolio in shape is undoubtedly challenging, as the investment landscape evolves rapidly.
But the task can be more straightforward than some believe, as investors just need to show some initiative. For those looking to keep their portfolios in shape, here are a few pointers.
Weathering Volatility
Beta is a measure of a stock's systematic risk, or volatility, relative to the overall market. The S&P 500 is often used as the benchmark, with a beta of 1.0 representing the market average.
A beta greater than 1.0 indicates that a stock is more volatile than the market, while a beta less than 1.0 suggests the opposite. Essentially, low-beta stocks provide a higher level of ‘defense,’ whereas high-beta stocks are known for their higher returns, or ‘offense.’
Investors can use beta to help balance out their risk profile, helping during intense volatility spikes. A classic example of a low-beta stock is Coca-Cola (KO - Free Report) .
Staying Updated
Regularly reviewing earnings reports and news releases is crucial for staying informed as an investor. These reports provide a wealth of information, including revenues, expenses, and profits. By keeping up with this data, you gain a deeper understanding of the business and can spot any potential ‘red flags.’
In addition, quarterly reports and news releases provide deeper insights into a company's strategy and plans. For example, the report may detail new products or services planned for launch or discuss plans to tap new markets.
By understanding a company's strategy, investors can more easily evaluate its long-term growth potential. Nvidia’s (NVDA - Free Report) quarterly releases have been a great example of why investors can’t fall asleep behind the wheel.
Let Winners Run
The "Let Winners Run" and "Cut Losers" strategy is simple: Investors should hold onto stocks that are performing well to benefit from their continued growth and compounding returns while selling underperforming stocks to prevent further downside.
Of course, selling losers also frees up capital for better opportunities. The approach helps provide a portfolio that grows steadily over time by leveraging the strengths of successful stocks while minimizing the impact of the ‘bad apples.’
Bottom Line
Keeping a portfolio in shape can be challenging, but it’s certainly not as difficult when implementing some guardrails.
Managing volatility, staying up to date, and letting winners run are all recipes for portfolio success.