Every portfolio needs adjustment from time to time, as the market lives and changes.
Does it mean an investor should always be in the loop? Yes. Does that mean they have to monitor the market’s state day and night? No.
Read on to find five handy tips for managing your time properly.
1. Daily: track important news only
Tracking market gossip and rumours every day is time-consuming, let alone unnecessary. Instead of hot tips, focus on credible information sources. Be aware of the market shape, concentrate on the news related to interest rates changes and updates on commodities prices and labour costs.
What are the dependencies? Firstly, stock prices drop whenever interest rates rise, and vice versa. Secondly, commodities and fuel prices influence stock prices as well. For example, oil companies always feel better when oil prices are higher. And thirdly, rising labour costs inevitably push stock prices down. If you know all the above-mentioned interdependencies, you can be more efficient at tracking important news and decision-making.
2. Weekly: keep up with the weekend reports
There’s no point in following financial media every single moment, reading or watching them once a week will be just enough. Print or web magazines and TV shows on finance are sources of handy hints about investment strategies and expert opinions on the market direction.
Stay up to date with the weekend market reports. They give general overviews of the market’s health that matters a lot for portfolio management. Make sure that you grasp the major changes in industries, rather than dive deep into details. Additionally, don’t draw inferences from the data or comments arriving day-to-day. They are not about the big picture or long-term trends, and are usually dramatised or glossed to get viewers glued to screens.
3. Quarterly: study financial reports
Be aware of the company’s latest performance, risks and opportunities and focus on its financial statements. Publicly traded companies have to bring their fundamentals to light. Sometimes numbers and financial reporting become the main language to communicate with stock investors.
What do you have to keep track of as an investor? Firstly, analyse the Management Discussion & Analysis (MD&A) section of the company’s annual report. In this, management outlines last year’s financial and management performance, as well as future targets and projects. Also, dig the quarterly 10-Q and annually 10-K performance reports submitted to the SEC, as well as proxy statements filed before the meeting of shareholders.
4. Semiannually: contact the insiders
If you want to find out the company’s direction and its biggest risks, ask those who have the most precise answers. Insider experts in charge of companies are busy folk. However, they can find some time to shine a light. Make up a list of questions and enter correspondence. Not only will you learn the behind the scenes, but you’ll get the industry overview and some smart and useful insights. No time is wasted for homework, as you obtain ready-to-use information.
5. Yearly: listen to conference calls
There’s no better way to get inside the management's mind than a conference call. If the management team ponders on the company’s future online, you can get a true impression of their attitude: whether they sound enthusiastic or pessimistic. There’s always a session of questions from analysts, where the management’s reaction can be illustrative too. In addition to what they say, pay attention to what they pass over in silence. If a company doesn’t cover projections this time, that can be a sign there’s something wrong within the company. Generally speaking, listen attentively and draw conclusions to make the smartest financial decisions.
To participate in the company’s conference call, contact the investor relations department or go straight to the company’s investor section online for the information on the following call.
Having a good sense of what is valuable information saves efforts and time. You shouldn’t spend hours on useless sources, but rather focus on informative reports and news. Being a successful investor doesn’t imply full-time monitoring of the market environment. It can work much more effectively.