7 tips for building up the portfolio

With the portfolio allocation strategies presented above, you can build up a good portfolio even without stock market experience. However, you must not take up any securities wildly, because this involves risks that can reduce your returns and weaken security. However, structuring your portfolio is easy with the following tips.

Tip 1: Only invest money you can spare

On the one hand, all your current costs, from living expenses to repayments, must be covered. Secondly, you should always have a "nest egg" in your account that amounts to two to three months' salary.

Only money that exceeds these amounts can be invested in securities with a clear conscience. Because once invested, it is tied up for years and is not immediately available to you in an emergency.

Tip 2: Build up your portfolio gradually

Rome was not built in a day. So start with the main component of your portfolio. For inexperienced beginners, we recommend a very broadly diversified ETF. Later, you can gradually buy more shares and new assets in exness withdrawal time and thus differentiate your portfolio according to the investment strategy. You can add new shares in batches. Simply buy a fixed block of shares every three months to mitigate price fluctuations.

Tip 3: Avoid clusters

The so-called cluster risk exists if you only include securities from one market or country in your portfolio. If prices fall in this area, your portfolio loses enormous value. Therefore, concentrate on several countries and several industries. For example, from the food, chemical, pharmaceutical and automotive sectors.

Tip 4: Pay attention to the weighting of individual stocks

Especially if there are several ETFs in the portfolio, individual stocks may be overweighted. If, for example, you have tracked the MSCI World and the DAX with index funds, some German shares are overweighted because they are included in both indices. For orientation: A rule of thumb says that individual stocks should never account for more than 5 % of your total investment.

Tip 5: Use gold for stabilisation

Gold is considered crisis-proof and stable in value, which is why private investors are also advised to invest in gold. However, make sure that this share does not exceed 10%. This is because neither interest nor dividends accrue and gold offers a much lower return than shares. On the other hand, with a low gold share your portfolio is somewhat more volatile.

Tip 6: Adjust your portfolio

It is important to review your portfolio regularly. If individual securities have performed better than others, the original ratio (for example 60/30/10) may have been disturbed.

Always stick to your strategy and restore the ratio with additional purchases or sales. You should carry out this rebalancing once a year.

Tip 7: Stay away from leverage products

Derivatives such as futures or warrants are very popular alternatives for experienced traders to make short-term profits. However, such assets are too dangerous for newcomers to securities trading, as they are designed for daily trading, have a complicated structure and can incur high losses.

Alternatives are social trading, through which you can follow other traders and copy their trading activities. However, almost exclusively CFDs and Forex are traded via this - and no real shares.

Conclusion: There is no perfect portfolio allocation

Whether conservative or aggressive - none of the portfolio structuring strategies presented is better than the others. All of them have their advantages and disadvantages and are suitable to different degrees for different types of investors. How you should structure your portfolio depends on your personal situation, your risk tolerance and your investment objective: