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Rules of Portfolio Optimization

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Following are the basic Rules of Portfolio Optimization:  Rule #1: Investment should be of the Type, "LONG TERM".  Rule #2: Portfolio has to be "Reviewed once every month" (Needs to be re-visited).  Rule #3: Portfolio has to be "Rebalanced" at regular intervals (Advisable once a Month).  Rule #4: Ensure to pick up the Stock when it is "Rightly Priced" (Avoid highly priced stocks).  Rule #5: Gradually "Diversify your Portfolio" covering major sectors (say 20 scripts of 5% each).  Any new rules we come across will be added to these RULES.  Rebalancing has not been considered this week as we need to have good examples to explain the same. Any questions you have, please do not hesitate to put in your comments so that I can take them up in the following articles.  Stay tuned, following are the items that will get published in the following weeks:   What is Rebalancing the Portfolio?  First Optimized Portfolio from Indian Stocks. ...
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How to Optimize the Portfolio?

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  Let us consider the earlier example of the Optimized Portfolio (PU001-04252021) where we have considered 30 US stocks clubbed in “Dow Jones Industrial Average” ( https://optimizeportfolio. blogspot.com/2021/04/dow- optimized-portfolio-pu001- 04252021.html ).   We have highlighted and indicated the top 5 (in Green) that constitute the Optimized Portfolio with a specified weightage. Now what about the remaining 25 that were not mentioned is the question?   MMM CAT GS JNJ NKE VZ AXP CVX HD JPM PG V AMGN CSCO HON MCD CRM WBA AAPL KO IBM MRK TRV WMT BA DOW INTC MSFT UNH DIS Table showing all the 30 stocks of DOW Jones Industrial Average.   Let us consider we have 2 categories of Investors: New Investor , Who starts his investment based on the suggestion provided in Optimized Portfolio (PU001-04252021). Gradually increase your stake Month on Month with the weightage shared for AAPL, HD, NKE, UNH & V stocks. Also continue to keep a watch on the Monthly Review of the P...
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DOW Optimized Portfolio: PU001-04252021

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  DOW Optimized Portfolio: PU001-04252021 Hello All,  This week I have considered the 30 Large Cap stocks listed on Stock Exchanges of United States under "DOW Jones Industrial Average" and built an Optimized Portfolio for better returns with least risk / Volatility. Have also provided the Weightage / % of Portfolio that you can hold with a) Low Risk & also b) High Risk, along with c) Optimized Portfolio. For those who do not want to Risk, have provided an Optimized Portfolio (c) 0with Least Risk / Volatility and High Annual Returns. Note: We have come up with ONLY 5 Stocks from "DOW Jones Industrial Average" in this optimized portfolio, it means in the current situation it is not advisable to  start afresh with any of the remaining 25 stocks from this series / list. But if you are already holding any of them and have reaped good returns, you can continue to hold them in low % (around or less than 10%). Plan is to have a distributed and balanced portfolio. This ...
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Potrtfolio Optimization

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  Portfolio Optimization   Portfolio Optimization is a process to check the existing stock holdings (Portfolio) with historical data of the last 10 or more years (X-Ray) of an individual script and enhance the holdings to have lesser risk with good/high/stated annual return on the portfolio for Long Term.   Introduction The details shared here are based on the knowledge and experience and published for knowledge Enhancement. Here we have considered only Portfolio as the base block as against any specific script. This is because individual scripts can have lows and highs but overall the portfolio should be strong and healthy with a steady uptrend with better returns. Will be sharing Portfolios mainly from Indian & US Stock Exchanges, but the same can be applied to any portfolio in stock exchanges across the Globe.   Rules This is meant only for  Long Term Investment . Avoid going to overvalued scripts even though they have strong fundamentals. Balance the Por...
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