Stock portfolio should be like a Football Team

If you are a football team manager you will try to win all the matches. And how you will win is to select the best player available at that time based on the fitness, performance and their form. You you will not select some players and forget about them right. Because those players might go out of form and might not help you to win the games. The manager will review the teams performance periodically so that they can win most of the time.

PC: Pixabay.com

Now the same thing happens with the stock portfolio too. We tend to get more and more stocks in our portfolio either by getting tip or by just our intuition. But the problem is we don't get rid of the stocks and try to keep it for the long term even though it's not performing well. But the good portfolio should be having stocks which are fundamentally strong at that time, showing momentum and relative strength.

And similarly we have to review continously like in a month of some cycle to see if those stocks are good now also or you want to change it. If the stocks in the portfolio is not giving good returns then it's time to change it and try to get one which is good. Remove the weak performers and replace them with the stronger performance.

You don't have to be loyal to the stocks because championship are not won by keeping loyal out of form players. A winning portfolio should be the one which is dynamic which we get by updating the portfolio regularly. And that's why we should treat our stock portfolio like a football team and become a good manager of it. And that's why regularly reviewing the stock portfolio should be done from your side.