Making a Stock Market Investment Plan is Good Financial Investment Advice

Avoids the emotional roller coaster!

Your success with value investing will largely depend on your temperament and to what extent you can exhibit patience and discipline to make the best investments.

Sticking to a plan is part of this process.While plans may vary from investor to investor depending on age, capital available and investment time-line, most plans for investment in stock should have some common elements.


Key Elements of the Financial Investment Advice

The key elements of the financial investment advice includes having a buying strategy, a selling strategy, a portfolio management strategy and a strategy for performance management and review.

My buying strategy is my guide to finding the best stocks to buy using a set of 'buying rules' that remind me of the important characteristics of the best stock picks.

These rules also include information on types of companies to avoid.

Check out these buying rules that provide me with a degree of buying confidence.

My selling strategy provides me with a means to avoid panic stock selling. Using a set of six rules helps me to instil discipline in my selling decisions.

The rules cover situations that apply to when not to sell as well as when to sell. They help me to maximize profits and minimize losses by using IRR (internal rate of return) performance criteria to inform selling decisions

See whether these rules may be helpful to you.

The stock portfolio management strategy allows for a consideration of a number of factors including, among others, portfolio asset allocation, portfolio loans and portfolio tracking.

The strategy includes the types of stock to include, the optimum portfolio size, the dividend return to aim for, as well as tax and gearing strategies.

As well as these, portfolio performance monitoring is an important consideration.

Check out how I deal with portfolio management data.

Performance appraisal tools provide a means to measure the performance of the total stock portfolio, as well as the performance of individual stocks in terms of my stock performance requirements.

The performance appraisal tools that can do this job are Excel worksheets that incorporate the IRR formula. Check this out and then link to the discussion of the worksheets.


To Conclude

Your plan may differ from the financial investment advice encapsulated in my investment plan that I use in conjunction with value investing.

You may have a different risk profile, investment time horizon and/or investment objectives. The plan that I outline may provide a useful exemplar.

The related articles below examine each aspect of the plan in more detail.

Related Articles

My selling strategy - cover situations that apply to when not to sell as well as when to sell. It helps to take the emotion out of selling.

My stock portfolio management strategy - allows me to set parameters relating to portfolio construction. These are important considerations for investment in stock. Worth a look?

My performance measurement and review strategy - allows me to learn from both my successes and from my mistakes.

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