In fact,if you look at the most millionaires and investors , the income often comes from capital gains and from dividends from theirs Investment Portfolio every single month.
- Diversify: My advice is to mix it up with different sectors/stocks and never take more risk than you are comfortable with. My investing portfolio is based on the first two leading stocks in the three different sectors. If you want don’t have time to follow so many stocks you can always invest your money in the index fund and you probably ask yourself “Why Index found”? Index found is following the whole market and the monthly management fees are very low – the lowest in this industry.If you want you can check out and compare the best funds at Morningstar.com
- Never have all your money invest at the same time , you should keep between 20 and 50 % in cash all the time. If the market fall the stocks will be cheaper and then you want to have money to buy them. One of the easiest ways for passive income is to set up a small monthly investment is essential for eliminating as much risk as possible.
Portfolio definition: Conservative Vs. Aggressive
Generally, the more risk you take, the more aggressive your portfolio will be, devoting a larger portion to equities and less to bonds and other fixed-income securities. Conversely, the less risk , the more conservative your portfolio will be. Here are two examples: one for a conservative investor and another for the aggressive investor.
The main goal of a conservative portfolio is to protect its value. The allocation shown above would yield current income from the bonds, and provide long-term capital growth potential from the investment in high-quality equities.
The Aggressive portfolio has average risk tolerance, attracting those willing to accept more risk in their portfolios in order to achieve a balance of capital growth and income.
The Bottom Line
Overall, a well-diversified portfolio is your best bet for the consistent long-term growth of your investments. It protects your assets from the risks of large declines and structural changes in the economy over time. Monitor the diversification of your portfolio, making adjustments when necessary, and you will greatly increase your chances of long-term financial success.