A great way to develop and demonstrate your commitment and passion to pursuing a career in investment management is to actively manage your own investment portfolio. You don’t need much money to start investing and it's the best way to get hands-on experience with markets and different investment strategies.
Here are some general steps for building your own investment portfolio:
- Determine your investment goals: It's essential to define your financial goals before you start investing. Do you want to generate income or capital appreciation, or both? How much risk are you willing to take on? What's your investment timeline?
- Assess your risk tolerance: Determine how much you can afford to lose and how much volatility you can tolerate.
- Consider asset allocation: Asset allocation is the process of dividing your investment portfolio among different asset classes such as stocks, bonds, and cash. The right asset allocation will depend on your investment goals, risk tolerance, and time horizon.
- Choose your investments: Once you have determined your asset allocation, you can start choosing the specific investments to include in your portfolio. Research different investments and select ones that align with your investment goals, risk tolerance, and time horizon. Build your own financial models to assess price targets and update them regularly as new information emerges.
- Monitor your portfolio: It’s important to regularly review your investments and adjust your portfolio as necessary.
- Be patient and disciplined: Building a successful investment portfolio takes time, discipline, and patience. Don't make impulsive decisions based on short-term market fluctuations.
Resources to help you get started
There are stacks of resources out there to help you build your skills. Here are a few to get you started.
Articles and guides
Subscribe to websites
Investment websites help you learn the basics and keep up with market news and trends:
- The Motley Fool - daily market commentary and stock recommendations. Also has a great Investing Basics section
- Morningstar - widely respected stock analysis website. Also has a comprehensive Getting Started section
- ASX - the Australian Securites Exchange website, featuring another comprehensive Start Investing section
- Livewire Markets - daily news, market insights and analysis from leading investors and commentators
- Investopedia - market news and education, investing simulator and no-cost educational resources. Great site for beginners
Build a paper portfolio
Practice stock trading with virtual money to get a feel for it:
- The Investopedia Stick Market Simulator is a free tool to give you insights into how the stock market works and how to use an online brokerage.
Future IM/Pact regularly shares content recommended by leading investors so join our community to learn from the professionals.
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