Markets Aug 17, 2015 05:07 AM EDT

Some Essentials in Building an Investment Portfolio

By Staff Writer

Investing can be complicated and comes with risks. There is no way to predict how the market will behave in a given time or what you call perfect marketing timing. Luckily, there are some ways to create a solid portfolio that will let you relax despite the ups and downs of the market.

Forbes recently published an article that will help you do just that. Here are some of the tips worth remembering.

Determining your purpose of investment will not only tell you where you want to go but it would also let you plan what to do in order to achieve your goals.

Realize how much money is involved in order to achieve your purpose.

Know your financial situation at the present and set realistic risk appetite. Although most people know how much they have in savings, not all of us understand how much we are willing to risk in order to get our goals. If you want something so bad, it might convince you that you are willing to go for high risk. However, when the market goes up and down, you may start feeling anxious about the situation. This is not being realistic. If you can't handle the risks you may either change your timeframe or your goals.

Have a plan in mind for your investment. Understand the basics of the specific securities that make up your portfolio. A good portfolio is very diverse in terms of exchanges as well as geographic regions that are seen to perform well. You should also think about risk tolerance when creating the portfolio.

Give your portfolio time to grow. Although there are other investment schemes that are better held short-term, holding on to your portfolio in the long term will usually yield better results.

Concentrate on the factors that you can control. Because you can't control the way the market goes up or down, the best thing that you can do is to stick to your plan and commitment.

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