Stocks, shares, and keeping track of your portfolio

If you are investing for the longer term, then the importance of checking on your portfolio may not be abudantly clear. But important it is, for a whole range of factors.

For instance suppose you decided to split your investments in certain percentages in various different sectors. If one performs really well and another badly, then your portfolio suddenly has a completely different balance in capital terms to that you started with: so you have a decision to make there whether to stick to that initial ratio or not, and if so then you may need to buy/sell to adjust the balance.

And of course if a company is clearly doing very badly and the signs are not looking good, then you may wish to sell even as a long term investor because you don't want a company to go bust and lose all your share capital in it for instance.

In other words, if a company does really well and you are investing long term you should still consider taking some profits, and for those that perform really badly, be prepared to take a reasonable hit than a massive hit by letting it fall to the floor (stop losses can help here - see the separate article on stop losses for more information).

So how do you decide when to take profits and when not to, all things being equal? Through doing your careful research and seeing where the share price has moved, and re-evaluating against the list you initially drew up for buying that share and seeing if you can still say yes to most of the reasons as to why you expect its value to go up.

No-one has perfect information, so all you can do is make an informed and considered decision. But bear in mind as with any decision that could still prove to be wrong - there is luck in share trading which means there is risk in it, even for a long term investor.

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Stocks, shares, and keeping track of your portfolio

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