How to Evaluate Investment Portfolio for Upper Middle Class Some upper middle class people may invest their surplus in capital market in order to gain more expected returns. How to evaluate their investment portfolio is becoming an important situation for them. Portfolio performance is not just simply looking at “how much I started with and how much do I have now.” people should look at portfolio performance relatives to investment goals, investment climate, and risk tolerance. The following are some strategies for upper middle class investors that help them evaluate their portfolio successes. • Investors understand why they are investing is the basic step in structuring a portfolio. They should understand their investment objectives and expectations, such as what kind of risk am I willing to take? What is my …show more content…
Fundamental and technical analyses are the most popular evaluation tools. Under the fundamental analysis, there are three basic ways: 1. Forecast the company’s potential growth prospect. They can forecast the firm’s potential growth prospect by looking at the historical stock prices. Usually a long-term descending stock price causes the decline of the firm which is too risky for the return. 2. Look for the firm’s earning ability. Two main points to show firm’s earning ability are P/E ratio and earning per share. The earning per share is a useful measure of profitability because it shows how much money the company is making for its shareholders. What is more, P/E ratio indicates that investors expect earnings in the future. 3. Look into the stocks’ risks. Basically we use Beta to measure the risk affects the stock price. A high Beta means high risk, so we have looked for the company with low Beta. Technical analysis is used to compliment fundamental analysis as it has strength in short- term trading. There are some ways to do technical