A simple guide to creating a solid portfolio.
Updated
Hello,
Creating a solid portfolio can be a tough task for most investors. Understanding easy ways of beginning that journey can greatly improve your performance as an investor & greatly amplify your results.
The times of just buying the S&P and waiting for your money to keep growing is long gone & active investing can widen the gap between yourself and the normal investor. Below we will be guiding on how you can future proof your stock picks using the NAS100 as an example & point of beginning.
1: Understand the index
Understanding the index you want to begin with is the 1st point to look at. This will help you choose the correct index for your journey. In our case The Nasdaq 100 is an index of the hundred largest non-financial stocks listed on the NASDAQ stock exchange. The companies included in this index are often technology or biotechnology firms.
2: Do an analysis of where the index is trading at
A simple analysis of where the index is trading at guides you on where most of its components would be trading at. In our case the index is correcting giving as hope that we will easily find companies that are in great points for future buys. The health of the companies will be key in our choices.
The chart below shows that we are in correction
3: Know the components of your index
All the components of the NAS 100 can be easily found on the tradingview.com website via link tradingview.com/...DAQ-NDX/components/. A simple google search will also list all this companies for you. The NAS 100 has 100 components meaning that you have 100 companies to look at. For the purpose of this educational post we will be looking at the biggest 3 companies in the index.
We shall evaluate the 3 companies using both fundamental analysis & technical analysis. From fundamental analysis we shall look at key metrics in the balance sheet (does the company have debt), From the income statement (Are revenues steadily increasing over time) & Cashflow statement (Does the company have positive free cashflow). Please note that you can always get deeper with understanding the companies more. Companies that you can access their products are even better for retail investors.
Next, we shall evaluate the 3 companies from a technical view using wave analysis. We shall then make calls on whether we are looking for buys or sells or wait recommendations.
The 3 companies we shall evaluate are Microsoft, Apple & Alphabet.
Company 1: Microsoft
Microsoft Corp engages in the development and support of software, services, devices, and solutions. It operates through the following business segments: Productivity and Business Processes; Intelligent Cloud; and More Personal Computing.
Key metrics
1: Does the company have debt: (Yes) 2023: Total debt 79.44 billion: Total Debt represents all the interest-bearing obligations of the company, regardless of when these obligations are due for payments.
2:Are revenues steadily increasing over time? Yes ( 2021: USD 168 billion, 2022: USD 198.27 billion, 2023: USD 211.92 billion)
3: Does the company have positive free cashflow
Yes (2023: USD 59.48)
Technical analysis
Company 2: Apple
Apple, Inc engages in the design, manufacture, and sale of smartphones, personal computers, tablets, wearables and accessories, and other variety of related services.
Key metrics
1: Does the company have debt: Total debt: Total debt USD 123.93 billion: Total Debt represents all the interest-bearing obligations of the company, regardless of when these obligations are due for payments.
2:Are revenues steadily increasing over time? YES
2021: USD 365.82 B 2022: USD 394.33 B 2023: USD 383.29 B
3: Does the company have positive free cashflow: YES; USD 99.58 billion
Technical analysis
We have an alert for buy from USD 170.8 areas
Company 3: Alphabet
Alphabet, Inc is a holding company. It operates through the Google segment which includes its main Internet products such as ads, Android, Chrome, hardware, Google Cloud, Google Maps, Google Play, Search, and YouTube.
Key Metrics
1: Does the company have debt: YES USD 29.87 B
2: Are revenues steadily increasing over time? YES. 2022: USD 280.88 B, 2023: USD 307.16B
3: Does the company have positive free cashflow: YES. USD 69.50 Billion
Technical analysis
Buying at current place not good. Look for sell if price breaks trendline aggressively.
Below are our recommendations for the 3 stocks.
Microsoft: No trade setup
Apple: Look for buy from USD 170.8 areas
Alphabet: Buying at current place not good. Look for sell if price breaks trendline aggressively.
We will then look at all the other stocks that make the components of the index using the above metrics & choose the best stocks to invest in.
Good luck in your journey. We shall be sharing more educational content.
Creating a solid portfolio can be a tough task for most investors. Understanding easy ways of beginning that journey can greatly improve your performance as an investor & greatly amplify your results.
The times of just buying the S&P and waiting for your money to keep growing is long gone & active investing can widen the gap between yourself and the normal investor. Below we will be guiding on how you can future proof your stock picks using the NAS100 as an example & point of beginning.
1: Understand the index
Understanding the index you want to begin with is the 1st point to look at. This will help you choose the correct index for your journey. In our case The Nasdaq 100 is an index of the hundred largest non-financial stocks listed on the NASDAQ stock exchange. The companies included in this index are often technology or biotechnology firms.
2: Do an analysis of where the index is trading at
A simple analysis of where the index is trading at guides you on where most of its components would be trading at. In our case the index is correcting giving as hope that we will easily find companies that are in great points for future buys. The health of the companies will be key in our choices.
The chart below shows that we are in correction
3: Know the components of your index
All the components of the NAS 100 can be easily found on the tradingview.com website via link tradingview.com/...DAQ-NDX/components/. A simple google search will also list all this companies for you. The NAS 100 has 100 components meaning that you have 100 companies to look at. For the purpose of this educational post we will be looking at the biggest 3 companies in the index.
We shall evaluate the 3 companies using both fundamental analysis & technical analysis. From fundamental analysis we shall look at key metrics in the balance sheet (does the company have debt), From the income statement (Are revenues steadily increasing over time) & Cashflow statement (Does the company have positive free cashflow). Please note that you can always get deeper with understanding the companies more. Companies that you can access their products are even better for retail investors.
Next, we shall evaluate the 3 companies from a technical view using wave analysis. We shall then make calls on whether we are looking for buys or sells or wait recommendations.
The 3 companies we shall evaluate are Microsoft, Apple & Alphabet.
Company 1: Microsoft
Microsoft Corp engages in the development and support of software, services, devices, and solutions. It operates through the following business segments: Productivity and Business Processes; Intelligent Cloud; and More Personal Computing.
Key metrics
1: Does the company have debt: (Yes) 2023: Total debt 79.44 billion: Total Debt represents all the interest-bearing obligations of the company, regardless of when these obligations are due for payments.
2:Are revenues steadily increasing over time? Yes ( 2021: USD 168 billion, 2022: USD 198.27 billion, 2023: USD 211.92 billion)
3: Does the company have positive free cashflow
Yes (2023: USD 59.48)
Technical analysis
Company 2: Apple
Apple, Inc engages in the design, manufacture, and sale of smartphones, personal computers, tablets, wearables and accessories, and other variety of related services.
Key metrics
1: Does the company have debt: Total debt: Total debt USD 123.93 billion: Total Debt represents all the interest-bearing obligations of the company, regardless of when these obligations are due for payments.
2:Are revenues steadily increasing over time? YES
2021: USD 365.82 B 2022: USD 394.33 B 2023: USD 383.29 B
3: Does the company have positive free cashflow: YES; USD 99.58 billion
Technical analysis
We have an alert for buy from USD 170.8 areas
Company 3: Alphabet
Alphabet, Inc is a holding company. It operates through the Google segment which includes its main Internet products such as ads, Android, Chrome, hardware, Google Cloud, Google Maps, Google Play, Search, and YouTube.
Key Metrics
1: Does the company have debt: YES USD 29.87 B
2: Are revenues steadily increasing over time? YES. 2022: USD 280.88 B, 2023: USD 307.16B
3: Does the company have positive free cashflow: YES. USD 69.50 Billion
Technical analysis
Buying at current place not good. Look for sell if price breaks trendline aggressively.
Below are our recommendations for the 3 stocks.
Microsoft: No trade setup
Apple: Look for buy from USD 170.8 areas
Alphabet: Buying at current place not good. Look for sell if price breaks trendline aggressively.
We will then look at all the other stocks that make the components of the index using the above metrics & choose the best stocks to invest in.
Good luck in your journey. We shall be sharing more educational content.
Note
Apple stock update We have an alert for buy from USD 170.8 areas
Note
Portfolio Manager
Dyer & Blair investment Bank, Kenya.
Follow below handles for investment insights
Twitter: twitter.com/thesharkke
Free in-depth stock markets analysis Telegram channel: t.me/stocksfromtechnicaleye
Dyer & Blair investment Bank, Kenya.
Follow below handles for investment insights
Twitter: twitter.com/thesharkke
Free in-depth stock markets analysis Telegram channel: t.me/stocksfromtechnicaleye
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