Maintain the Perfect Investment Portfolio

investment portfolioIn order to maximize the earnings from investments, it is highly important that the investment portfolio is maintained wisely. You can maximize your earnings and minimize your risk by developing a good investment portfolio. There are a number of factors that must be considered while maintaining an investment portfolio. Following are the things you must consider:

Diversity in the Portfolio

Diversification in the investment portfolio is the best tool to minimize the risk associated with investment. You can diversify your investment portfolio by including a mix of equity shares, bonds, and government securities. It is important that the portfolio reflects investments in different sectors that are independent from each other. This is because companies in a single sector are influenced by the industrial factors at the same time. For example; if a new regulatory requirement requires an industry to increase environmental clean-up costs, this will affect the financial performance of all the companies operating in that industry.

Evaluate the Financial Health of the Companies

Doing proper research from making an investment is highly important. Placing a complete reliance on the analyst reports may not prove to be a good idea at times as there are certain trends that may be overlooked in the reports. You should conduct your own research on the companies. You can use ratio analysis to evaluate the trends in profitability and EPS of the companies. Continue reading

Are Mutual Funds Actually Beneficial For You?

mutual fundsThe popularity of mutual funds is very well known among the investors. The mutual funds have grown significantly over the past few decades. The pace at which they have been accepted by investors all around the globe is commendable. The main reason behind the success of mutual funds is their structure.

Mutual funds provide the investors an easy way to make an investment in a very well diversified portfolio. If put in simple terms mutual funds provide their services by making investment easier for small investors.

Although the fact that mutual funds provide the ease in investment cannot be denied, there are certain weaknesses in the structure of mutual funds. Mutual funds may “hard sell” their services and they may not multiply your investments in the manner as they claim. Continue reading