How to Build a Share Portfolio

Rodney Hobson

Effective share portfolios for the private investor
Running an efficient portfolio of shares means buying and selling the shares that make the most sense for you, and at the right time and price. Rodney Hobson, author of the bestselling Shares Made Simple, sets out how to do this without having to be a financial expert or full-time trader. Using plain language, he takes the reader simply and logically through the process, giving helpful examples and real-life case studies at every turn.

In How to Build a Share Portfolio you can:

- find out how to determine the right objectives for your portfolio
- learn how to pick shares that fulfill your investment ambitions, and when to drop those that no longer do so
- understand how best to set your portfolio's size and ensure it is diversified against risk
- discover the best ways of monitoring your portfolio, and of reducing losses and rebalancing it when necessary.

Anyone who is thinking of investing, however much or however little, will benefit from the information, advice and guidance contained in this book. Similarly, those who already have a portfolio will find it helps them to stand back and reassess whether they are making the most of their money and whether their portfolio is meeting their needs.

PrefaceIntroductionPart I - The Choice of Assets1. The Range of AssetsWhat is a portfolio?SharesCashGoldGiltsCompany bondsPropertyWorks of artCollectiblesFundsExchange Traded FundsSummary comparison of assetsCosts Mix and matchWhy build a properly constructed portfolio?Lessons learnt2. The Attractions of EquitiesPerformanceDiversificationForeign stocksLessons learntPart II - Building a Portfolio3. Basic DecisionsInvesting for incomeInvesting for growthHow many?Pounds, not numbersSectorsWeightingsOver and under weightLessons learnt4. Top Down and Bottom UpTop downBottom upBest of both worlds5. FundamentalsWhat to look forCompany analysisLessons learnt6. Choosing Between Cyclicals and DefensivesTiming issuesVisibility of earningsCyclicalsDefensivesLessons learnt7. Investing for DividendsWhere to look for dividendsDividend cutsHigh payersDividends in dollarsLessons learnt8. Investing for Capital GrowthGrowth companiesValue investingCase Study: Dogs of the DowLessons learnt9. When to InvestBull or bear marketVolatile marketsBuying opportunitiesPound cost averagingLessons learnt10. New IssuesTaken on meritPricing Book buildingLessons learnt11. When Share Prices FallCatching falling knivesProfit warningsLessons learntPart III - Managing Your Portfolio12. Monitoring Your PortfolioHow often to monitorMeasuring performanceBenefits of monitoring13. Stop Losses and Averaging DownStop lossesAveraging downLessons learnt14. Adding to Existing Holdings 177Changes in circumstances 178 Lessons learnt 18015. Selling Existing HoldingsKeeping calmTracking news announcementsTaking some profitsLessons learnt16. Rights Issues and PlacingsRight issuesGrandiose schemesRights issues at or near the market pricePlacings and open offersSpecial dividends and share buybacksLessons learnt17. Takeovers and DemergersTakeoversDemergersLessons learnt18. Costs and TaxesCosts Taxes19. An Example PortfolioShares boughtPortfolio valuation (at start)Dividends receivedIssues facedLessons learntIndex