DotBig Forex: Managing ATVI and CSCO Stocks in a Diverse Portfolio

If they have enough money, more and more are thinking about investing in the Forex market and increasing the turnover of their capital. Thanks to the development of the Internet and computer technologies, today everyone can invest in the financial stock market by trading securities and shares.

The first thing a novice investor needs to do is to learn about possible risks and ways to minimize them, for example, thanks to the DotBig site diversification method in managing ATVI and CSCO stocks.

CSCO Briefly

CSCO or Cisco Systems develops and sells products and services based on IP connection protocols designed for enterprises in the field of communications and information technology.

The company is focused on five main areas. These are backbone routing, switching and services, collaboration solutions, virtualization of data centers and cloud software, video technologies, and architectures for business transformation. The company’s net sales in fiscal year 2013 amounted to $48.6 billion.

ATVI Briefly

Activision Blizzard is a maker of interactive entertainment products and services. ATVI distributes content and services on modern gaming platforms, including game consoles, PCs, and mobile devices. The company also maintains its online gaming service Battle.net, which facilitates the creation of user-generated content in video games, digital distribution, and social media.

The average annual share price growth in the 2010s was 19.7% and 20.8%, respectively, considering the reinvestment of ATVI dividends.

Forex Stocks Trading Specs

The stock market is perhaps one of the oldest financial markets. Recently, only professional investors could earn money by investing in stocks. Today, this market is accessible to individuals and is becoming increasingly popular thanks to the DotBig broker CFD contracts for price differences. CFDs allow you to make money on changes in the value of shares without actually buying or selling them.

Features of the stock market

• During periods of general depression, the value of stocks can increase significantly, which allows you to make a profit even in the absence of economic growth in general.
• There are two ways to make money: on the rise in the value of shares and on the fall.
• Stock trading is linked to specific exchanges that have their work schedule.
• There is no need to physically own shares to profit from changes in their quotes.

Diversification Definition

To get a higher return, you need to choose investments with high risk. Their value may rise sharply or fall sharply. It all depends on how much the investor is willing to take risks.

According to modern portfolio theory, risks can be managed through diversification. For example, DotBig exchange offers its clients such an investment option.

Its essence is that if you combine high-risk types of assets with others, you will get a balanced portfolio. The overall risk will be lower than that of individual assets. For example, instead of buying only stocks, you can combine them with bonds.

It is necessary to choose assets that are practically uncorrelated with each other. Let’s say the price of some securities increases with rising oil prices while others, on the contrary, fall. Thus, an investor can protect himself from Forex volatility and significant losses since the profit on one paper compensates for losses on another.

Rebalancing the portfolio will help to maintain the level of risk in the long term. If initially stocks occupied 75% of your portfolio in value and bonds — 25%. But some stocks have risen in value, and now they occupy 85%, and debt securities — 15%. To return the portfolio to its original state, you need to rebalance it. For example, sell some of the more expensive shares and reinvest the proceeds in bonds.

How to Create and Diverse Forex Portfolio with Stocks?

The main thing is to define your investment goal. Thus, you will understand what kind of capital you want to receive as a result of your DotBig Forex investments and how long it will take to form it. And it will also become clear what level of risk you are willing to take for this.

It should be borne in mind here that the longer the investment period, the more high-risk assets may be in the portfolio, but also with higher potential returns — first of all, these are the same stocks. If the investment period is short, 2–3 years, it is better to keep the bulk of the portfolio in assets with predictable returns — most often these are bonds.

After defining the purpose and the investment period, another crucial stage is the selection of an asset. Here you can resort to several levels of diversification at once.

• The currency. It is good if, in addition to assets in one currency, part of your portfolio is invested in securities traded in another currency. Then a sharp change in the price of one of the currencies will not have a decisive impact on the value of your entire portfolio.
• The country. If all your investments are concentrated in the funds of only one country, you risk incurring losses if problems suddenly start in its economy. This is also called country risks.
• An asset class. First of all, these are stocks and bonds. By investing in stocks, you are betting on a potential increase in their price. Bonds are a bet on predictable and stable coupon income payments. You can also invest in gold and currency, as well as in exchange-traded funds.
• The economic fields. It may be the oil and gas sector, pharmaceuticals, or the production of engines for cars. Some industries have been around for a long time and now bring stable dividend income, and somewhere innovations can change the world.
• The companies. It is the most challenging level of diversification. It involves evaluating the financial and production performance of companies and comparing these data with those of competing ones and the whole industry.

If you find it hard to decide where to invest your money, use the services of a DotBig trading platform. You will create an optimal portfolio and will be able to manage transactions and earn on the ups and downs of various stocks, including ATVI and CSCO.