Managing Your Portfolio
How many times have you owned a stock only to become disillusioned, yet hopeful, as it declined 10% or 20%? How about 40%? Well, it’s natural for people to want to hold losing stocks because selling would be an admonition of error. Very few people like to be wrong and this fundamental human desire is dangerous when it comes to the market. Many would prefer to wait, no matter how painful or how much their stocks decline, until they are at a profit and hence, they are right. Others simply just don’t like to make decisions and consequently, if a decision subsequently declines, they are hesitant to make another decision to correct the situation.
Change, often does not occur until the pain of changing becomes less than the pain of remaining the same. Everything we do has a certain level of pain (risk) or pleasure (reward) associated with it. Whether crossing the street, trading foreign currency, or undergoing brain surgery we have a choice to engage in certain activities and we usually have some understanding of the risk associated with each activity. The greater the perceived risk, especially with respect to wealth, prosperity, and livelihood the more difficult it can be to make a decision. Well, what if we can harness risk and make it our friend?
Let’s look at some questions that are critical to our success and ability to manage risk:
What to buy?
When to buy?
How much to buy?
When to sell a winner?
When to sell a loser?
When to sell a laggard?
Knowing the answers to these questions will not predict your success with investments but, they will give you a clearly defined means of calculating and managing risk in your portfolio. In the end you will have a substantially higher opportunity for achieving positive results by understanding and determining the level of risk in your portfolio.
Over the next several weeks we will take a closer look at each of the questions above and then culminate with how each of the questions are both interrelated and critical to determining your outcome.
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The information contained in this report or information provided does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation of an offer to buy or sell any security referred herein. Past performance may not be indicative of future result. No buy or sell orders may be given using the email, please call the above number to contact your Advisor. Christopher DeMaria is registered with and securities offered through Kovack Securities, Inc. Member FINRA/SIPC. 6451 N. Federal Highway, Ste 1201, Fort Lauderdale, FL 33308 (954) 782-4771. Investment Advisory services are offered through Kovack Advisors, Inc. DeMaria Financial Services is not affiliated with Kovack Securities, Inc. or Kovack Advisors, Inc.