FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka


Submit PostSubmit Post
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post



Latest topics

» Sri Lanka Bonds Go From Asia’s Worst to Best After China Loan
by dayandacool Today at 11:31 pm

» CSE listed companies...Failed or collapsed
by High-flyer Today at 9:14 pm

» L B FINANCE PLC (LFIN.N0000)
by kanishkaecomm Today at 5:17 pm

» කොටස් වෙළඳපොළ2020
by කොටස් වෙළඳපොළ2020 Today at 11:52 am

» 14 May onwards -Road Clear to Enter one of the Asias Most Undervalued Stock Market
by kalu351 Today at 6:34 am

» Plantation Sector
by කොටස් වෙළඳපොළ2020 Yesterday at 10:13 pm

» FUTURE of BROWNS INVESTMENT PLC (BIL)
by ONTHEMONEY Yesterday at 9:50 pm

» Company Financials or Group Financials?
by ronstyn53 Yesterday at 8:07 pm

» Banking Sector Analysis
by ADVENTUS Yesterday at 7:34 pm

» CHEVRON LUBRICANTS LANKA PLC ((LLUB.N0000)
by Bakkabwoi Yesterday at 5:24 pm

» Grain Elevators Earnings Review With Q1 Results
by EquityChamp Yesterday at 10:11 am

» What will happen tomorrow?
by Lakshman wijayawardhana Yesterday at 9:57 am

» Most Undervalued Shares
by Lakshman wijayawardhana Yesterday at 9:54 am

» Future of Talawakelle Plantation PLC
by කොටස් වෙළඳපොළ2020 Yesterday at 5:02 am

» GLAS will be winner with Super Gain.
by invest thinker Thu May 13, 2021 11:59 am

» NEVER GIVE UP BECAUSE: Stock market for beginners
by Asoka Samarakone Wed May 12, 2021 9:37 pm

» Make it your goal to stay positive in a negative market
by reyaz Wed May 12, 2021 9:01 pm

» Daily Foreign Transactions
by Pradeep90 Wed May 12, 2021 8:32 pm

» Ban of chemical fertilizers is a great news
by samaritan Wed May 12, 2021 9:59 am

» SANASA DEVELOPMENT BANK PLC (SDB.N0000)
by samaritan Wed May 12, 2021 9:48 am

EXPERT CHRONICLE™

ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

CHRONICLE™ NEWS PRODUCTS

FINANCIAL CHRONICLE™

Views & Reviews, Analysis, Evaluations, Discussions, Gossip and Hot Tips relating to Sri Lankan companies listed on the Colombo Stock Exchange (CSE)
Contribute




DAILY CHRONICLE™

Latest news and articles published in Newspapers, Websites, Blogs and other online news sites relating to business and investments in Sri Lanka
Contribute



ECONOMIC CHRONICLE™

This is a section that provide news, views, analysis, predications relating to Political and Socio-Economic factors and how such activities affect the Stock Market and other economic activity of the Country.

Contribute




EXPERT CHRONICLE™

This is an exclusive section for Expert Articles which will help member to share knowledge through comments and responses of the members. All members are allowed to reply and make comments to these articles.

Contribute


Submit Post


CHRONICLE™ YouTube

Youtube Videos and other visual presentations relating Stock market and other investment advise submitted by members or other contributors.

Contribute


Submit Post


කොළඔ කොටස් වෙළඳපොළේ වංශකථාව
කොළඔ කොටස් වෙළඳපොළේ ලැයිස්තුගත සමාගම් කොටස් ගැන තොරතුරු¸විශ්ලේෂණ¸සාකච්ඡා¸ කටකතා¸රසකතා යන සියල්ල අපේම සිංහලෙන් කතා කළ හැකි ‘කතා මණ්ඩපය’

Contribute

Twitter Feeds
POPULAR COMPANIES
A

ABANS ELECTRICALS PLC

ACCESS ENGINEERING PLC Hot

ACL CABLES PLC

ACL PLASTICS PLC

ACME PRINTING & PACKAGING PLC

AGSTAR PLC

AITKEN SPENCE HOTEL HOLDINGS PLC

AITKEN SPENCE PLC

ANILANA HOTELS AND PROPERTIES PLC

ARPICO INSURANCE PLC

ASIA ASSET FINANCE PLC

ASIA CAPITAL PLC

B

BAIRAHA FARMS PLC

BALANGODA PLANTATIONS PLC

BIMPUTH FINANCE PLC

BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

B P P L HOLDINGS PLC

BROWNS BEACH HOTELS PLC

BROWNS INVESTMENTS PLC

C

CARGO BOAT DEVELOPMENT COMPANY PLC

CENTRAL INDUSTRIES PLC

CEYLON COLD STORES PLC

CEYLON GRAIN ELEVATORS PLC Hot

CEYLON TEA BROKERS PLC

CEYLON TOBACCO COMPANY PLC

CHEVRON LUBRICANTS LANKA PLC

COLOMBO FORT LAND & BUILDING PLC

COMMERCIAL BANK OF CEYLON PLC

CITRUS LEISURE PLC Hot

COMMERCIAL CREDIT AND FINANCE PLC

D

DANKOTUWA PORCELAIN PLC

DFCC BANK PLC

DIALOG AXIATA PLC

DIALOG FINANCE PLC

DIPPED PRODUCTS PLC

DISTILLERIES COMPANY OF SRI LANKA PLC

DUNAMIS CAPITAL PLC

E

EAST WEST PROPERTIES PLC Hot

EASTERN MERCHANTS PLC

EXPOLANKA HOLDINGS PLC

E-CHANNELLING PLC

F

FIRST CAPITAL HOLDINGS PLC

G

GALADARI HOTELS (LANKA) PLC

GUARDIAN CAPITAL PARTNERS PLC

H

HATTON NATIONAL BANK PLC

HAYLEYS PLC

HAYLEYS FABRIC PLC

HAYLEYS FIBRE PLC Hot

HEMAS HOLDINGS PLC

HIKKADUWA BEACH RESORT PLC

HNB ASSURANCE PLC

HVA FOODS PLC

J

JANASHAKTHI INSURANCE COMPANY PLC

JOHN KEELLS HOLDINGS PLC Hot

JOHN KEELLS HOTELS PLC

L

LANKA ASHOK LEYLAND PLC

LANKA IOC PLC

LANKEM CEYLON PLC

LANKEM DEVELOPMENTS PLC

LAUGFS GAS PLC

LAUGFS POWER LIMITED

LOLC FINANCE PLC

LOLC HOLDINGS PLC

LUCKY LANKA MILK PROCESSING COMPANY PLC

M

MELSTACORP PLC

N

NATIONAL DEVELOPMENT BANK PLC

NATION LANKA FINANCE PLC

NESTLE LANKA PLC

O

ORIENT FINANCE PLC

OVERSEAS REALTY (CEYLON) PLC

P

PANASIAN POWER PLC

PEOPLE'S LEASING & FINANCE PLC

PIRAMAL GLASS CEYLON PLC

PRIME FINANCE PLC

R

RAIGAM WAYAMBA SALTERNS PLC

RENUKA AGRI FOODS PLC

RENUKA CAPITAL PLC

RENUKA HOLDINGS PLC

RICHARD PIERIS AND COMPANY PLC

RICHARD PIERIS EXPORTS PLC Hot

ROYAL CERAMICS PLC

S

SAMPATH BANK PLC

SEYLAN BANK PLC

SIERRA CABLES PLC

SINGHE HOSPITALS PLC Hot

SMB LEASING PLC

SOFTLOGIC HOLDINGS PLC

SOFTLOGIC LIFE INSURANCE PLC

SRI LANKA TELECOM PLC

SWISSTEK (CEYLON) PLC Hot

T

TEEJAY LANKA PLC

TESS AGRO PLC

THREE ACRE FARMS PLC

TOKYO CEMENT COMPANY (LANKA) PLC Hot

U

UNION BANK OF COLOMBO PLC

V

VALLIBEL FINANCE PLC

VALLIBEL ONE PLC Hot

VALLIBEL POWER ERATHNA PLC

W

WASKADUWA BEACH RESORT PLC


You are not connected. Please login or register

FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » How do you build a stock portfolio?

How do you build a stock portfolio?

Go down  Message [Page 1 of 1]

1How do you build a stock portfolio? Empty How do you build a stock portfolio? Tue Jul 07, 2015 9:13 am

Melissa Pereira


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
The stock market and its potential for risk daunt many people. However, a well-built stock portfolio is likely to outperform the other investments over time. It is possible to build a stock portfolio yourself, but even if you work with a stockbroker, knowing your goals and understanding the nature of the market will help you build a successful portfolio. Given below are tips to evaluate stocks and build a portfolio.



Method 1 of 2: Portfolio-building strategies
1. Commit to invest over the long term. 
It is possible to make “a killing in the market” by owning a fast-rising stock for a short period of time, but that sudden gain can be wiped out by an equally sudden loss. A sustained presence in the market is more likely to pay off over time than trying to make a quick buck.

*As part of investing for the long term, determine the amount of money you can afford to commit to the stock market for five years or longer and set that aside for investing. Money you’ll need in a shorter period of time should be invested in shorter-term investments such as money-market accounts.



2. Understand the different kinds of stocks.
Stocks represent an ownership stake in the company that issues them. The money generated from the sale of stocks is used by the company for its capital projects and the profits generated by the company’s operation may be returned to investors in the form of dividends. Stocks come in two varieties: normal stocks and preferential stocks. Preferential stocks are so called because holders of these stocks are paid dividends before owners of normal stocks. Most stocks, however, are normal stocks, which can be subdivided into the categories below:

  •  Growth stocks – Stocks projected to increase in value faster than the rest of the market, based on their prior performance record. They may entail more risk over time but offer greater potential rewards in the end.

  •  Income stocks – Stocks that pay better dividends than other stocks. 

  •  Value stocks – Stocks that are “undervalued” by the market and can be purchased at a price lower than the underlying worth of the company. The theory is that when the market “comes to its senses”, the owner of such a stock would stand to make a lot of money.

  •  Defensive stocks – Shares in companies whose products and services people buy, no matter what the economy is doing. They include the stocks of food and beverage companies, pharmaceutical companies and utilities (among others).

  •  Cyclical stocks – These stocks rise and fall with the economy. They include stocks in such industries as airlines, chemicals, home building and steel manufacturers.

  •  Speculative stocks – A stock with a high degree of risk. 




3. Develop an investment strategy that meets your goals. 
Decide what type of stock portfolio is most important to meet your overall financial goals.

n If making a lot of money over time is important to you, you’ll want to build a stock portfolio of largely growth stocks, with some blue-chip and income stocks and possibly a few well-timed cyclical stocks.

  •  If you need to earn a continuing income from stocks, you’ll want to build a portfolio composed primarily of income stocks, with some blue-chip and defensive stocks for balance.

  •  Understand that your financial goals may change over time, and adjust your portfolio accordingly. Generally, the younger you are, the more risk you can take. You may be better served with a growth-oriented portfolio. The older you become, the more you’ll think about retirement income and may be better served with an income-oriented portfolio.





4. Diversify your holdings. 
Regardless of whether you pursue a growth-oriented or income-oriented strategy, you should rely on more than one or two stocks to make up your portfolio. Investing in multiple stocks spreads your risk over various companies, possibly within various industries and classes of stock. Ideally, poor performance by one or two stocks will be offset by significant gains in your other stocks.



5. Invest regularly. 
Just as saving regularly can build your bank balance, investing regularly can build your portfolio over time. Buying stock on a regular basis lets you take advantage of rupee-cost-averaging, which allows you to buy more shares per rupee during times when stock prices are low and take advantage of the increased value when prices are high.



Method 2 of 2: Evaluating stocks for your portfolio 
1. Look at the price-to-earnings ratio. 
The price-to-earnings (P/E) ratio can be identified as either the stock’s current price against its earnings per share for the last 12 months (“trailing P/E”) or its projected earnings for the next 12 months (“anticipated P/E”). A stock selling for Rs.10 per share that earns 10 cents per share has a P/E ratio of 10 divided by 0.1 or 100. A stock selling for Rs.50 per share that earns Rs.2 per share has a P/E ratio of 50 divided by two or 25. You want to buy stock with a relatively low P/E ratio.

  •  When looking at the P/E ratio, figure the ratio for the stock for several years and compare it to the P/E ratio for other companies in the same industry as well as for indexes representing the entire market, such as the S& P SL 20 Index.




2. Look at the stock’s book value. 
The book value, or shareholders’ equity, is the theoretical amount that stockholders would be paid for each share owned if the company went out of business. Stocks that sell close to or below book value are considered cheap.

  • Look for reasons a stock would be selling near or below book value. It may mean the stock is undervalued and is a bargain or it may mean that the company is having trouble.




3. Look at the return on equity. 
Also called return on book value, this figure is the company’s income after taxes as a percentage of its total book value. It represents how well shareholders are profiting from the company’s success. As with the P/E ratio, you need to look at several years’ worth of returns on equity to get an accurate picture.



4. Look at total return. 
Total return includes earnings from dividends as well as changes in the value of the stock. This provides means of comparing the stock with other types of investments.



5. Evaluate the debt-to-equity ratio.
 This ratio is the company’s book value divided by its debt. The more money the company pays in bond interest or lines of credit with banks, the less it can invest in its own future, protect itself from downturns or pay dividends. Debt-to-equity ratios vary in different industries and should be compared against other companies within the same industry to gauge whether the ratio is acceptable or excessive.



6. Observe the stock’s volatility.
How much the stock’s price has changed in the past is a good measure of how likely it is to change in the future. One measure of volatility is called “beta”, which compares the fluctuations of an individual stock against those of an index such as the ASPI.  The beta of 1.0 means that stock fluctuates to the same extent as the index. A lower beta means it fluctuates less and a higher beta means it fluctuates more than the index.
Courtesy: Daily Mirror 6 July 2015

2How do you build a stock portfolio? Empty Re: How do you build a stock portfolio? Tue Jul 07, 2015 12:13 pm

VALUEPICK

VALUEPICK
Expert
Expert
This is also good time to readjust our portfolio and add more winning stocks.

3How do you build a stock portfolio? Empty Re: How do you build a stock portfolio? Tue Jul 07, 2015 2:01 pm

GameUP1030

GameUP1030
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@VALUEPICK wrote:This is also good time to readjust our portfolio and add more winning stocks.
I have more SFL N and what should I do? sell to adjust by replacing another counter or hold????????? scratch

Sponsored content


Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum