Portfolio Management

2011_NewComer · 1 Portfolio Management Mon Mar 28, 2011 6:59 pm

2011_NewComer

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Hi All,

Is it risky to have shares from only one sector in my portfolio, if I am investing for about 4 to 5 months.
I am more interested about Banking sector than others, so will it be a bad thing if I collect shares only from that sector (like comb, samp, ntb, dfcc, etc..)

Please share your thoughts.

Thanks. Smile

swan03 · 2 Re: Portfolio Management Mon Mar 28, 2011 7:22 pm

swan03

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2011_NewComer wrote:Hi All,

Is it risky to have shares from only one sector in my portfolio, if I am investing for about 4 to 5 months.
I am more interested about Banking sector than others, so will it be a bad thing if I collect shares only from that sector (like comb, samp, ntb, dfcc, etc..)

Please share your thoughts.

Thanks.

Maintaining a diversified portfolio is the best. Then you could bear the losses.

duke · 3 Re: Portfolio Management Mon Mar 28, 2011 7:46 pm

duke

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bank and finance, and plantations are the sectors where you have some choices in CSE. others you have only one or two listed companies. just an observation.

Antonym · 4 Re: Portfolio Management Mon Mar 28, 2011 8:47 pm

Antonym

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Diversification is a means of spreading your risk - and not putting all your eggs in one basket. The general opinion is that it is good to diversify your investments.

However, I (and a certain Mr Buffett) agree with that, but only upto a point.... Why go for sub-optimal returns when you can put all your money on a sector that you are certain about?

I am currently invested in only 3 companies - in 2 sectors - because they suit my conservative objectives: non-speculative, decent dividend yield & low P/BV ratio.

StocksWatch · 5 Re: Portfolio Management Mon Mar 28, 2011 9:16 pm

StocksWatch

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For someone who is new in the share market, diversification is a good strategy to minimize his exposure to the risk factor. However, diversification can adversely affect your return on investment as a positive return gained from one sector/company can be erased by the negative return from another sector/company.

One can argue that if you want to diversify your portfolio to minimize the risk, why not invest in government bonds or fixed deposits?

If you can analize the market and identify stocks that can perform better than the market, then you better stict your investment to those stocks.

I have read that diversification is essentially for those who does not know what they are doing!