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Stocks
Building a Stock Portfolio to Help Meet Your Investment Goals
When it comes to building a stock portfolio, knowing your investment goal is crucial. That, along with how much time you have before you need the money and how much risk you're willing to take when investing in the stock market, will help you determine how your stock investments should work with the rest of your stock portfolio.When to Consider Investing in the Stock Market
Stock investments can help your investment portfolio by providing potential growth, income from dividends or a combination of the two. However, the value of any stock you invest in can fluctuate, and when you sell your stock, it may be worth more or less than you originally paid. When building a stock portfolio, you should carefully consider the risks of investing in the stock market and develop a diversified asset allocation strategy that fits your goals, investing time frame and risk tolerance.Diversifying Your Stock Portfolio
Diversifying your stock portfolio is a way to help offset the risk your stock investments are exposed to. The goal is to spread out your stock investments in different sectors and include different investment characteristics so that when a stock or sector performs poorly, the performance of your stock investments in other sectors may help offset the swings in the total value of your stock portfolio. Following are some basic guidelines you can use when diversifying your stock portfolio:• Invest in approximately 20 to 30 stocks in at least six to eight sectors with different investment characteristics.
• No more than 25% of the total value of your stock portfolio should be in any one sector.
• No more than 15% of the total value of your stock portfolio should be in any one stock.
• You should invest a minimum of approximately 3% to 4% of the total value of your stock portfolio in each stock.
Selecting Individual Stock Investments
Deciding which stocks to invest in can be difficult, especially if you have a low tolerance for risk. That's why it's important to develop an asset allocation strategy, research stocks that fit within your strategy and invest in stocks that have the potential to meet your specific goals, whether you want growth, income or a combination of the two. Your Financial Advisor can provide you with research reports you need to help make your investment decisions and help you select individual stocks for your stock investment portfolio.Investing in Stock Through A.G. Edwards
When you invest in stock through A.G. Edwards, your Financial Advisor can provide you with a wide range of stock services, including:• Asset allocation strategy development
• Individual stock selection
• Help in deciding when to buy and sell your stock investments
• Stock portfolio reviews
• Concentrated equity strategies (for when you own too much of one stock, such as company stock)
• Access to a variety of stock investment programs
• Stock research reports provided by Wachovia Securities and third-party providers, including Wachovia Capital Markets, LLC and Standard & Poor's