7 Simple Strategies for Growing Your Portfolio (2024)

Although some investors may be content to generate income from their portfolios without growing their overall value, most investors would like to see their nest eggs increase in value over time.

There are different ways to increase the value of a portfolio. The best approach for a given investor will depend upon various factors such as their financial goals, the types of investment they choose,risk tolerance, investment time horizon, and the amount of money that they have to invest.

Some approaches take more time or have more risk than others. However, there are tried-and-true methods that investors of all stripes have used to grow their savings and investments.

Key Takeaways

  • Growth can refer to increasing account value or capital appreciation of assets.
  • Growing the value of an investment portfolio can be difficult as it's impossible to time the market and because many events that affect investments are out of your control.
  • Growth in the value of your accounts, and by how much, will depend on a variety of factors, such as risk tolerance, time horizon, and the amount of principal invested and available to invest.
  • There are a few strategies that you can employ to help your portfolio grow, such as a buy-and-hold strategy, diversification, and dollar-cost averaging.

Defining Growth

Growth can be defined in several ways when it comes to investing. In the most general sense, any increase in account value can be considered growth. This increase can result from, for example, the interest paid on a certificate of deposit, or from higher closing prices from one day to the next of stocks owned, or even when you deposit additional money into your investment account.

However, where investment return is concerned, growth usually refers to capital appreciation, where the price or value of the investment increases over time. Such growth can take place over both the short and long term, but substantial growth in the short term generally carries a high degree of risk.

Here are seven strategies that you can use to grow the value of your portfolio of investments.

1. Buy and Hold

Buying and holding investments is perhaps the simplest strategy for achieving growth. If you have a long time to invest before needing your money, it can also be one of the most effective. Those investors who simply buy stocks or other growth investments and keep them in their portfolios with only minor monitoring are often pleasantly surprised with the long-term results.

An investor who uses a buy-and-hold strategy is typically not concerned with short-term price movements andtechnical indicators.

Total growth refers to the capital appreciation of an investment plus any income it pays out. For example, stocks that pay dividends offer investors the opportunity for an increase in value due to a rise in the price of their shares plus the increase in value when dividend payments are credited to their accounts.

2. Market Timing

Those who follow the markets or specific investments closely, such as day traders, may be able to beat the buy-and-hold strategy if they can consistently time the markets correctly to buy when prices are low and sell when they are high.

This strategy will yield much higher returns than simply holding an investment over time, but it also requires the ability to gauge the markets, entry points, and exit points successfully.

The average investor does not have the time to watch the market on a daily basis. Neither do they have the trading experience nor the necessary access to relevant, real-time data. Therefore, it is better to avoid attempts to time the market and focus on other investing strategies better geared toward long term investing.

3. Diversification

This strategy is often combined with the buy-and-hold approach. Different types of risk, such as company risk and interest rate risk, can be reduced or eliminated through diversification. Diversification refers to the process of investing in different types and classes of assets so as to reduce the risk associated with any one investment.

Numerous studies have proven that asset allocation is one of the key factors in investment return, especially over longer periods of time.

The right combination of stocks, bonds, and cash can allow a portfolio to grow with much less risk and volatility than a portfolio that is invested completely in stocks. Diversification works partly because when one asset class is performing poorly, another is usually doing well.

4. Invest in Growth Sectors

Investors who want aggressive growth can look to sectors of the economy such as technology, healthcare, construction, and small-cap stocks to get above-average returns in exchange for greater risk and volatility. Some of this risk can be offset with longer holding periods and careful investment selection.


An investment advisor may be able to help you grow your portfolio's value, especially if your interests don't include the markets and investing. However, be aware that not all investment advisors are successful. Do your homework first by researching potential advisors' backgrounds and experience. And always ask for an advisor's performance results.

5. Dollar-Cost Averaging

A common investment strategy, dollar-cost averaging (DCA), is used most often with mutual funds. Using DCA, an investor allocates a specific dollar amount to periodically purchase shares of one or more specific funds.

Because a fund's net asset value (NAV) will vary from one purchase period to the next, an investor can lower the overall cost basis of the shares as fewer shares are purchased when the fund price is higher and more shares are bought when the price declines. DCAthus allows the investor to reap a greater gain from the fund over time.

Another advantage of DCA is that investors don’t need to worry about buying at the top or bottom of the market or trying to timetheir transactions. They simply commit to investing a sum of money regularly. In this way, they grow the value of their holdings via an ever larger number of shares and position themselves to benefit from the capital appreciation of those shares.

6. Dogs of the Dow

Michael O'Higgins outlines this simple strategy in his book, Beating the Dow. The "dogs" of the Dow is a stock-picking strategy that consists of selecting the Dow stocks with the highestdividend yields. Those who purchase these stocks at the beginning of the year and then adjust their portfolios annually have usually beaten the return of the DJIA index over time(although not every year).

There are several unit investment trusts (UIT) and exchange-traded funds (ETFs) that follow this strategy. So, investors who like the idea but don't want to do their own research of individual stocks can purchase these stocks quickly and easily with a single investment.


This method of picking winning stocks based on specific growth characteristics that position them for major price moves upward was developed by William O'Neil, founder ofInvestor's Business Daily. His overall idea was that a sound investment strategy based on proven rules was the key to successful long-term growth investing.

His methodology is quantified by the acronym CAN SLIM. It stands for:

  • C: The (C)urrent quarterly earnings per share (EPS) of a company need to be at least 18% to 20%higher than they were the year before.
  • A: The (A)nnual earnings per share needs to reflect material growth for at least the previous five years.
  • N: The company needs to have something (N)ew going on, such as a new product, a change of management, etc.
  • S: The company should be trying to repurchase outstanding (S)hares, which is often done when companies expect high future profits.
  • L: The company needs to be a (L)eader in its category instead of a laggard.
  • I: The company should have some, but not too many, (I)nstitutional sponsors.
  • M: The investor should understand how the overall (M)arket affects the company's stock and when it can best be bought and sold.

Because it involves time and effort on an ongoing basis, CAN SLIM isn't an investing approach for everyone.

How Can You Make Your Portfolio Grow Faster?

Ways to make your portfolio grow faster include choosing stocks over bonds, investing in small-cap companies, investing in low-fee funds, diversifying your portfolio, and rebalancing your portfolio regularly.

What Is the 80/20 Rule of an Investment Portfolio?

The 80/20 rule of an investment portfolio states that 20% of a portfolio's holdings should constitute 80% of its returns and similarly, 20% of holdings could contribute to 80% of losses.

Is a 70/30 Portfolio Aggressive?

A 70/30 portfolio consists of 70% stocks and 30% bonds. It is more aggressive than a portfolio allocation of 60% stocks and 40% bonds because it consists of more stocks, which are considered to be higher risk than bonds.

The Bottom Line

These are just some of the simpler methods for making your money grow. There are more sophisticated techniques used by both individuals and institutions that employ alternative investments, such as derivatives, that can control the amount of risk taken and amplify the possible gains that can be made.

For more information on how you can find the right growth strategy for your portfolio, consult your stockbroker or financial advisor.

7 Simple Strategies for Growing Your Portfolio (2024)


7 Simple Strategies for Growing Your Portfolio? ›

A 70/30 portfolio is an investment portfolio where 70% of investment capital is allocated to stocks and 30% to fixed-income securities, primarily bonds.

What is the 70 30 portfolio strategy? ›

A 70/30 portfolio is an investment portfolio where 70% of investment capital is allocated to stocks and 30% to fixed-income securities, primarily bonds.

What is the 5 portfolio rule? ›

This rule suggests that investors should not allocate more than 5% of their portfolio in any one stock or investment. The idea behind this rule is to limit the potential risk to the overall portfolio if one investment does not perform as expected.

What are the strategies for portfolio expansion? ›

How Can You Make Your Portfolio Grow Faster? Ways to make your portfolio grow faster include choosing stocks over bonds, investing in small-cap companies, investing in low-fee funds, diversifying your portfolio, and rebalancing your portfolio regularly.

What is an example of a growth portfolio? ›

Examples of growth assets are equities (i.e., stocks), real estate, and cryptocurrency. Since growth assets are considered aggressive, they are riskier and more volatile than other assets. Unlike income assets such as bonds, growth assets cannot guarantee you will get your principal and interest.

Which portfolio strategy is best? ›

Moreover, diversification is the main component of the Modern Portfolio Theory (MPT). According to the theory of different investors, this is the best way to achieve better results by choosing the high risk and high return or low risk and low return asset classes.

What is the most successful investment strategy? ›

Value investing is best for investors looking to hold their securities long-term. If you're investing in value companies, it may take years (or longer) for their businesses to scale. Value investing focuses on the big picture and often attempts to approach investing with a gradual growth mindset.

What is Warren Buffett's 90/10 rule? ›

Warren Buffet's 2013 letter explains the 90/10 rule—put 90% of assets in S&P 500 index funds and the other 10% in short-term government bonds.

Is 80/20 better than 60/40? ›

The All Country World 80/20 Portfolio obtained a 6.73% compound annual return, with a 12.74% standard deviation, in the last 30 Years. The Stocks/Bonds 60/40 Portfolio obtained a 8.42% compound annual return, with a 9.60% standard deviation, in the last 30 Years.

What is the 3 portfolio rule? ›

The three-fund portfolio consists of a total stock market index fund, a total international stock index fund, and a total bond market fund. Asset allocation between those three funds is up to the investor based on their age and risk tolerance.

What are the stages of a portfolio? ›

There are three major stages: planning, execution, and feedback.

What are the steps in the portfolio management process? ›

Understanding the needs of your client and preparing an investment policy statement represent the first steps of the portfolio management process. Those steps are followed by asset allocation, security analysis, portfolio construction, portfolio monitoring and rebalancing, and performance measurement and reporting.

What are the 6 portfolio development phases? ›


These include (1) col- lection of a wide variety of artifacts, (2) projection of a purpose for the portfolio, (3) selection of artifacts for a specific portfolio purpose, (4) reflection on the value and role of each artifact, and (5) presentation of the portfolio.

What is portfolio and its process? ›

A portfolio's meaning can be defined as a collection of financial assets and investment tools that are held by an individual, a financial institution or an investment firm. To develop a profitable portfolio, it is essential to become familiar with its fundamentals and the factors that influence it.


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