Weekend Book Review - How to Build a Share Portfolio: A Practical Guide to Selecting and Monitoring
A book review by Luka Lukic of the AIM & PLUS Newsletter
In this book financial journalist Rodney Hobson aims to provide a straight forward introduction into the world of portfolio management and best practices to employ when selecting what you want to invest in. Thankfully it doesn't pretend to offer a guaranteed, one size fits all, scheme to become a millionaire, but instead attempts to compel the reader to assess what they wants to get out of their investment and then provides guidance to that end.
The book aims to explain the different behaviours of the various market sectors, and the importance of not only holding a range of shares, but diversifying them throughout the sectors to ensure a proper hedge. It also walks the reader logically through a range of factors than can, and most likely will, affect the share price and gives case studies to demonstrate the impact on real companies.
Probably the most important things an investor needs to learn is when to admit that they are wrong and to set stop losses. The allure of doubling up is enticing to the most experienced of traders and Hobson covers the dangers of this strategy well.
As a welcome bonus feature, the book presents a brief introduction to a full range of alternative assets investors can choose, from gold to works of art. While it offers a very limited explanation of the correlation between these assets, the author provides sufficient information on the pros and cons to spark the reader's interest to investigate elsewhere.
Overall, the book is an excellent beginners guide, covering all the basics of investing in shares. If you are taking your first steps into the financial markets, or just want to brush up on your knowledge, it will prove to be an invaluable ally.
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