The development of financial markets and the diversity of its players and products has led to a multitude of different types of portfolio management. Nevertheless, they can be segmented into different categories. Segmentation in active or passive management, or in traditional or alternative management can be used.
Money management tools
An essential component of portfolio management lies in the concept of “money management,” which consists in managing its forecasts of gains and losses as well as the size of its positions in an optimal way. In current market conditions, caution is required. More than ever, independent investors must be wary of bad habits.
Taking charge of your investments can be advantageous, provided you know some basic principles. Here are some golden rules for all investors, regardless of their profile and location:
Learn about investments before moving forward
Impulse purchases are not recommended in the financial markets. It is essential to understand the characteristics of each transaction, armed with a good dose of rigor, discipline, and patience. A person does not have to be a professional manager to understand market movements and stock behavior.
Some brokerage firms guide independent investors to identify and seize opportunities through increasingly sophisticated technologies. In particular, they make it possible to keep people informed of any relevant changes, whether regarding investments, taxation, savings or market conditions; Evaluate and analyze decisions easily or to educate themselves on the performance factors of each investment. The best online brokerage services offer calculators, tailor-made analysis, real-time securities tracking, varied and reliable sources of information, as well as training and seminars tailored to all levels.
Understand how margin accounts work
Margin brokerage accounts allow investors to seize opportunities quickly by collecting funds. But they must never forget that a margin is equivalent to a loan, which will ultimately have to be repaid! Indeed, if the value of margin investments decreases, the amount of the loan does not change.
It will still pay a fixed amount and even liquidate securities to bail out the margin, which can cause a significant capital loss. One must always take into consideration the value of one’s real assets. This is why hiring Kirk Chewning is a good option.