Create a successful investment strategy

Successful investors develop their own investment strategy and do stick to it. Create a stock portfolio with a healthy mix of companies with different market caps, industries and levels of risk. Include high yield dividend payers who raise their dividends regularly paired with low risk bonds in order to generate income while your other assets appreciate.
Definitely consider position sizing, a crucial but often overlooked factor. Do not allocate more than 5% of your total portfolio to any one position. Set trailing stops of 25% as a guideline. In a portfolio of minimum 20 positions (5% max. in one position) and a trailing stop of mx. 25% a downturn in any one stock will limit your downside to max. 1% of your total portfolio value-

This strategy will allow you to minimize risk but to enjoy unlimited upside. It is important to base your investment on a strong strategy and follow it. Review your holdings on a regular basis (at least once a year, best at the end of the year with tax efficient adjustments) and make sure, you are still on track to meet your investment goals.

Sven Franssen