By copying the strategy of successful investors, you can lower risk potentially raise returns First, keep monitoring the investors whose strategies you copy to make sure they do well. When searching for investors to copy, define your investment strategy -- long-term? Short-term? Stocks? Bonds? Use eToro's risk evaluator to see how much volatility your copied strategy will produce. Constantly monitor your own risk score, since it will be similar to those of investors you copy -- and make sure to diversify your investments. Lastly, avoid active trading -- studies show actively trading is a much worse investment strategy than buy-and-hold.
- Choose who fits your strategy by conducting a short analysis based on their Profile
- Keep monitoring your copy portfolio to see how each person you copy is performing.
- When searching, it is important for you to define your investment and trading targets and to ask yourself the following questions: Are you a stock investor?
"Don’t go back and forth with your choices, stand behind your copy strategy and expectations."
Originally published at 5 Simple Rules for Building a Copy Portfolio