3 Strategies To Increase Your Stock Returns In 2018

money stocksImproving your investment results is no easy task. The stock market is not for the faint-hearted and emotions can get the better of us as investors. As 2017 comes to an end, you may have noticed that your investment portfolio doesn’t look as healthy as it originally did. However, there are tools in which you can use to your advantage and boost your stock returns to the numbers you want to achieve. These are three strategies to receive more financial gain.

Value vs growth method

With the use of index tracking, value companies have outperformed growth companies in the U.S. and international stock markets. Focusing your investments on value instead of growth companies will increase your chances of receiving higher returns.

By doing this and using financial tools such as a covered call screener, you are more guaranteed to get an increase of returns in 2018. Even though value companies have lower stock prices than growth companies, several value firms will offer stock brokers an annual dividend payout. Dividends are particularly useful if the price of a stock has slow appreciation during a time period.

Rebalancing strategy

Inevitably, your investment portfolio will decrease from its original asset class percentages and won’t appear as healthy as it first did. The method of adjusting the portfolio back to its original allocation is known as ‘rebalancing’.

There are a couple of ways in which this can be accomplished. These are: adding money to the under-weighted section of the portfolio, selling a portion of the over-weighted section and adding this to the under-weighted piece, or, taking withdrawals from the over-weighted assets.

By rebalancing, you are enhancing your portfolio performance and making it look more financially appealing to potential sellers. Not only does it do this, but it puts your investments back to the original level of risk tolerance. Keeping an eye on your portfolio and ensuring that each investment is being efficient with beneficial results is key to selling high and buying low. This means that you’re more likely to make profits than losses.

Prioritising equities and bonds

Before we go into detail over this strategy, let’s first establish the difference between an equity and a bond. Equity is essentially another name for a stock, where investors buy them to generate growth. The ideal equity is one which increases in price over time which allows the investor to sell their share for a large profit. However, a bond doesn’t give much opportunity to grow in value and instead, provide regular portfolio income.

Even though investing in equities can be more volatile and risky, the stock market has consistently outperformed the bond markets over the past decade. But, by carrying out a manageable combination between the two within your portfolio, this can offer better stock returns.

Let’s round it up

As an investor, you can see just by reading these simple strategies how boosting your stock returns and improving your portfolio can be easily done. The key rule is to prioritise your portfolio by keeping it balanced and consistent. Don’t get carried away with the influx of money and lose your main financial vision.

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