Managing your portfolio: First, do no harm.

INVESTMENTCONSU L _ T
By Charles B. Schaap Jr., DO

Managing your portfolio: First, do no harm
* Allocate no more than 10 percent of your investment capital to any one stock on the initial trade.

ippocrates knew tbe key to invest only $10,000 in any one stock. If tbe good patient care was to do company suddenly goes bankrupt, tbe maxino barm. Tbe same pbiloso- mum your portfolio will lose is 10 percent. pby applies to good portfolio If, on tbe otber band, you invest 50 percent management. If you invest in of your capital in a single stock, balf of your individual stocks, you know tbat portfolio is at risk of being wiped out all you can't control a company's at once. Usually stocks decline in price profits, or tbe movements of tbe over several montbs before bankruptcy is * Limit market. Tbe only tbing you can declared; bowever, if you bougbt tbe stock at your risk a low price tbinking it was a bargain and tben control is your risk. by placing a tbe company declares bankruptcy, you're in Every time you invest in a par"stop order." ticular stock, you sbould take big trouble. wbatever measures you can to Wbile you can't eliminate losses altogetber, * Risk no prevent a large, irreparable loss you can limit tbem by using a stop order, wbicb more than from barming an otberwise you initiate witb your broker and wbicb 2 percent of bealtby portfolio. You can prevent instructs bim to sell tbe stock if it falls by a prethe total portfolio. big losses by spreading your determined amount. money among different stocks, Generally speaking, tbe amount you cboose putting protective "stop orders" is tbat wbicb you're willing to lose in order to in place, and taking on new stock positions take tbe cbance tbat tbe stock can go bigber in slowly and cautiously. value. Use stop orders on all trades at all times; Tbe key to preventive wealtb care is to accept not using one is like going into surgery without some small losses …