Investing can be a lot of fun...
You hear an interesting story and learn about an exciting company. It's new and thrilling. Your adrenaline starts pumping.
You do the homework, learning the ins and outs of the business. Then, after you've studied enough, you're ready to buy.
This is where the fun stops and the hard questions begin...
How many shares do you buy? Should it be a nice even number? Or should you target a certain dollar amount?
That brings us to a bigger question... What's the right percentage of your portfolio to put into this idea?
Is it risky? And if it is, should you buy more than normal, or less?
You can't move forward until you decide. So the real question to ask yourself today is this... Do you have a process to determine how much of a stock you'll buy?
Maybe it goes something like this...
Well, the stock is trading for around $5 a share, and I want around $5,000 of it, so I'll buy 1,000 shares.
Or maybe it's a little more like this...
I want EXACTLY $5,000 invested in this stock, just like when I buy all my other stocks – so I'll just divide $5,000 by the current stock price. In this case, I have to buy 987 shares.
If either of these is your "process," then how did you decide on $5,000 for the position?
What makes $5,000 the "right" amount?
You have a reason, I'm sure... For example, maybe you have $100,000, and with 20 stocks in your portfolio, you divide it up equally.
That's a fine answer... But why do you divide it up equally?
Is that the best way? Have you ever sat down and thought about this?
The point I'm making is that simply finding good investment ideas is only part of the battle. Sorting out how to put them correctly into a portfolio is a whole other thing.
So what is "right"?
This is THE important question... But it's too big a question to answer fully in a short DailyWealth essay. We've often covered simple tips that can help with your process – but those tips won't "pull back the curtain" to give you the thinking behind it all.
However, I talked in-depth about one of the best answers we've found during a special webinar this week...
I met up with my colleagues Porter Stansberry, Dr. David Eifrig, and Austin Root. We discussed a unique service we've set up to help you master this process.
It's called Stansberry Portfolio Solutions. And it's designed to help you start investing like a pro... because you'll know the exact number of shares you should buy for every recommendation.
Get this... Stocks soared last year. But our top-performing portfolio in this service absolutely crushed the market. It jumped 42% while the S&P 500 Index was up 31%.
We did it by carefully selecting positions and weighting them properly. We put real thought into how to maximize gains in a safe way.
Following Portfolio Solutions means you'll maximize your opportunity... You'll allocate appropriately... You'll follow a stop-loss discipline... And you'll finally learn how to "get there" with your investments.
If you missed our live discussion, click here to watch the video replay now.
Good investing,
Steve
P.S. We also each shared our favorite stock idea for 2020... and covered the one area of the markets we unanimously agree you should invest in this year.
It was an amazing night. But by far the biggest idea – and the most valuable – was how to get past the hard part of investing, using Portfolio Solutions. And importantly, now you can get more bonuses from joining than ever before.
So don't miss out. For all the details, you can check out the replay right here.
Further Reading
"Portfolio allocation is far more important in determining your results than simply which stocks or bonds you buy," Corey McLaughlin writes. If you want proof, just look at Mark Twain... Read more here: Don't Lose It All on a 'Mark Twain Gamble.'
"If stocks drop 30%... is your portfolio going to be OK?" Austin Root asks. As he explains, your portfolio allocations should be closely tied to your risk tolerance. But even if you can handle big losses, that doesn't necessarily mean you should... Learn more here.
While it's often overlooked, this is one of the most important questions you need to answer as an investor. And a few simple rules can help you get it right...
THE CLOUD-BASED LEADER CONNECTING A NEW GENERATION OF WORKERS
Today's company is riding a huge technology trend that is disrupting the traditional workplace...
Cloud services help connect folks online, no matter where they are. And more and more businesses are embracing the technology as millennials – the largest generation in the U.S. workforce – continue to blur the lines between home and work. According to a study by Bentley University, 77% of millennials say they are more productive with flexible work hours. Today's company provides the tools that attract modern employees...
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