Evaluate Your Portfolio. DEVELOP YOUR FINANCIAL PLAN 

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Evaluate Your Portfolio. DEVELOP YOUR FINANCIAL PLAN



You should evaluate your portfolio periodically because a change in your circumstances might necessitate a change in your asset allocation plan. In addition, fluctuating economic and market conditions might affect your asset allocation plan. Similarly, a change in a company’s business will have a direct bearing on the valuation of that company’s stock in your investment portfolio.

WHAT INVESTING IN STOCKS CAN DO FOR YOU

If you have a long investment time horizon and you can sleep well at night when there is a decline in the stock market, you should consider investing in stocks because
* Stocks provide returns in the form of dividends and capital appreciation. Historically, returns from stocks have been greater than the returns received from bonds and money market securities over long time horizons (seven-plus years). Investing in stocks provides growth to an investment portfolio in addition to any dividend income.
* Stocks provide a store of value. Buying and holding appreciated stocks in a portfolio is a tax-efficient way to increase wealth in that if the holding period is longer than a year before selling a stock, the capital gain is taxed at a maximum of 15 percent at the federal level. Gains from stocks held for less than a year are taxed at your marginal tax bracket, which could be as high as 35 percent. Check with your accountant that Congress has not made any changes to the Tax Code for the taxation of capital gains.
* Dividend income from qualified stocks is taxed at lower rates than interest from bonds and money market securities.

The following chapters outline the characteristics of the different types of stocks and the process of choosing stocks that are appropriate for your circumstances. Not all stocks are winners, and even the stocks of good companies decline in value. Understanding the factors that drive stock prices will steer you to assembling stocks for your portfolio that will achieve your financial objectives.




Categories in Trading Mistakes

Lack of Trading Plan
Planning plays a key role in the success or failure of any endeavor

Using too much Leverage
Determining the proper capital requirements for trading is a difficult task

Failure to control Risk
Refusing to employ effective risk control measures can ensure your long-term failure

Lack of Discipline
A lack of discipline can destroy even the most talented and best prepared trader

Useful Advices to Beginning Trader
You can control your success or failure

All about Stocks
Encyclopedia about Stocks. That you should know about Stocks before starting

Forex Glossary
All terms about Forex market

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