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Learning Investment and Portfolio Management Strategies

written by: Stephanie Mojica•edited by: Laurie Patsalides•updated: 6/29/2011

There's nothing usually "wrong" with using a stockbroker to teach you investment and portfolio management strategies. However, you will become a more informed investor if you take it upon yourself to learn even a couple of investment and portfolio management strategies without relying upon others.

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    Know Exactly What Assets are in Your Investment Portfolio

    You may be the type of investor who keeps track of assets using investment portfolio management software. However, you might be an investor who still struggles to explain the differences between mutual funds and bonds to your family and friends.

    No matter how much or little money you have invested, the key to learning investment and portfolio management strategies is to know exactly what assets are in your investment portfolio. This doesn't mean you must memorize every price, stock ticker symbol or the names of the corporation's management if this applies to your assets.

    What it entails is knowing basic facts about each item in your investment portfolio, such as the following:

    • What is the name of the company or group of companies in which you have invested?
    • What type of investment is it? Typical choices include stocks, bonds, and mutual funds.
    • How long have I held this particular investment?
    • Does this investment have associated loading fees or annual maintenance fees?
    • Why did I pick this investment, or did someone else pick it for me?
    • Overtime, how well have those investments been performing?
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    Know Exactly How Much Cash You are Investing Each Year

    Your personal spending plan may determine how much you invest each month, quarter, or year. You may have automatic drafts coming out of your checking account; these funds may very well be deposited into your brokerage account and distributed among your existing investments such as mutual funds or preferred stocks.

    You might automatically have deductions come out of your paycheck to invest into your company's stock plan. While this article is not entirely about retirement investing, you might also have deductions applied toward your company's 401K; alternatively, you might have automatic checking account drafts invest specific funds into an Individual Retirement Account (IRA) with your favorite bank, credit union, or brokerage.

    Make sure you keep track of how much comes out of your pocket (even the pre-tax dollars pocket) each month. These days, few investments are purchased with cash; it can become tempting to not closely record the dollars coming out of your paychecks or banking account.

    But you should know where your money is going, so you can adjust accordingly if you lose your job or your investment goes sour. Don't become one of those haphazard, compulsive gambling investors who potentially put their family's home and general well-being at stake. You're earning that money that goes into your investments; be smart and know just how much of it leaves your pocket and to where it goes.

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    If Something Sounds "Foolproof," Then it Probably Is Anything But

    The need for even the wealthiest people to learn investment and portfolio management strategies has become a hotter topic in the media in recent years; we've all heard stories of people losing everything due to a crooked stockbroker or a corrupt CEO at a major corporation. Some victims of these types of schemes have noted in news media interviews that something didn't "feel right" about the investment, but they were assured they "couldn't lose."

    Never believe anyone who says an investment is foolproof; this person is either outright lying to make off with your hard-earned bucks or painfully ignorant. Either way, that's not the kind of person you want to listen to for financial advice.

    If it doesn't feel right, listen to yourself. Numbers and shiny promises may feel more appealing than research and trusting your inner wisdom, but even in the financial world you are still your own best teacher.