Active investors need to monitor their portfolio for changes hourly on market days, if not daily. Passive investors, or those with a longer-term horizon, however, can afford to take a more relaxed approach. But all investors still have to do their homework from time to time. The following tips can help you manage your time and your portfolio with ease!

1. Keep Up-to-date Of Market Trends – Daily (recommended)
You don’t need your TV on CNBC or Bloomberg at all times (but I do!), but you should follow the latest financial magazines and trade journals, and try to tune in to finance-focused TV shows at least once a week. The web is another terrific place to read about strategies for investing, as well as to obtain a feel for what the professionals are saying about the market’s anticipated direction. To cut through all the excess reading – just make sure you get a handle on which industries are in or out of favor, along with the health of the overall market.

Read Or Listen To The News
Remember that geopolitical goings-on can affect your portfolio holdings; so can news of higher taxes, or currency fluctuations. This means that you should at the very least, catch the weekend market reports on tv or in your local/national newspapers. The goal here is to get the big picture or the trend, and then to make changes to your portfolio accordingly. This is why I put the daily summary of the markets and some news links daily. This way, I can help sift through some of the useless news and keep focus on sectors.

When watching the news, don’t make rash decisions based on what might be “breaking news”. Use this information to gather other news. Remember, lots of news is biased to get an angle, don’t get caught in the trap. When I hear something on the news, I always look at other articles and then apply these to my portfolio. I never rely on one source, after all, this my money I’m working with!

2. Review Financial Statements – Quarterly
This rule applies mainly to investors who buy individual stocks. Investors should review the Management Discussion & Analysis (MD&A) section of a company’s financial statements, as well as the 10-K, 10-Q and proxy statement (which are filed with the SEC) to get a better idea of management’s take on the opportunities and risks for the company along with its recent performance.

When you do this research, ask yourself the following questions:

* Is management optimistic about the company’s future?
* Has it made any insightful remarks about future earnings potential?
* Is it pondering a large acquisition or asset sale that could impact earnings?
* Is its credit in good or bad shape? Might that impact the future growth of the company?

These are all issues that may be addressed in the financial statements and which are helpful to the investor’s decision-making process. Be a detective, and try to dig past all the public relations garbage to see what management is really trying to say.

Sometimes the written word is the best venue for investors to gain valuable insight about the inner workings of a company, because face-to-face meetings and some conference calls are highly scripted, especially given the rise in shareholder-initiated lawsuits. (For more advice on getting the information you need from these documents, read What You Need To Know About Financial Statements and Footnotes: Start Reading The Fine Print.)


Free Stock Market GameMany times, I get the information online about past earnings reports, however, its also mailed out when the annual shareholder meetings are held. Personally, I have never been to one, but have had people tell me that its quite an experience. Remember, you own a piece of this company, your shares = voting power so keep afloat with what “your” company is doing with your money.

3. Attend Conference Calls – Yearly
Don’t be afraid of this process. Call up the investor-relations representative at the company you own stock in to see if you can listen in on the company’s year-end conference call. You can also check the company’s investor-relations section on their web page, which will often provide information on the date of the next call along with a link to listen to the call online.

Because of Regulation Fair Disclosure and the focus firms have these days on disclosing information to both individual and institutional investors at one time, many firms will allow individual-investor participation if the investor requests to participate in advance so that the company can arrange to set up a separate line.

What you are listening for in this call is what management says about the company’s future, but also the way in which they say it. Do they believe what they are saying? Are they enthusiastic or merely going through the motions? This information may provide you with the desire to either buy more shares or to liquidate your position entirely.

The first part of the call will go over the company’s financials for the time period along with any other pertinent developments. This is then followed by a Q&A session, generally with analysts, which is often the most important part of the call since you can see how management reacts to these tough questions.

Remember that many calls are scripted, and management is sometimes tight-lipped about the future because they don’t want to be blamed for any failures. With that in mind, the investor should not only be looking for what is said, but what isn’t said as well. You really need to read between lines and be an analyst.

If you have noticed, sometimes a company will post great earnings and during their conference call, they are failing to say certain things that might have been expected. This kind of stuff can drop share prices. If a company usually makes financial projections every quarter, but has suddenly stopped, then that may be a bad sign for the company, but a good sign for you to get out.

4. Avoid Speculation – Daily
You don’t need to track market changes on a daily basis to be successful as an investor, but being aware of the trends in the marketplace can help you to cut down on listening to “hot tips” or rumor mills throughout the day. A good way to stop the anxiety caused by the investing gossip you hear is to chase the right kind of information now. Two big areas to focus on are interest rates and commodity/labor costs.

Seek Interest Rate News
Higher interest rates usually beget lower stock prices, because if companies spend more money on loan payments, it will depress their earnings, and lower earnings equate to lower stock prices. Conversely, lower rates can mean that both companies and individuals will spend less on interest payments, bottom lines will increase, and higher earnings translate into higher equity prices. Knowing that most interest rate news is being accounted into the market prices now and being able to see how it can affect future prices will help you weed out any gossip tips you may receive now.

Track Commodity/Labor Costs
Investors should track fuel costs and other commodity prices to gauge how those fluctuations may impact their holdings. For example, some industries, such as trucking, see their profits drop dramatically when crude-oil prices increase. Others, such as oil-exploration companies, fare better when oil trades higher. Rising steel and lumber prices will adversely affect construction and manufacturing companies. Rising labor costs will bury everybody, but particularly retailers that typically hire workers at minimum wage. If you know what’s in your portfolio ahead of time, you can cut the anxiety in its tracks and adjust your portfolio accordingly.

Your Time Is Money
Determining when your information is the most valuable can help you cut down on the hours you spend sorting through reports and financials. Summer months are typically weak months in the market, and purchased stocks may flatten. September and October are also historically difficult months – and year-end tax-loss selling can depress stocks even further (these are all in normal situations). If you are happy that the stock you own or wish to purchase is on solid footing, you can continue with your purchases, but make sure you consider seasonal factors when trying to time a purchase or a sale.

Being an investor doesn’t always mean that you have to receive a daily subscription to expensive journals. Personally speaking, I sometimes spend an hour or two out of my day either at home, or the local Starbucks to do a little research and click in my trades. Its not a full time job unless you want it to be! Hopefully with this outline, you can manage your time and maximize your portfolio!

Happy Investing!

Aman, MBA

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