Using A Custom Portfolio to your advantage

For the benefits of new learners, a custom portfolio is a list of holdings which one keeps in their brokerage accounts to keep track of their stocks’ performance. In this list, you get to see how much share quantities you are holding, how much stakes ($) you have placed and the amount of paper losses and winnings you have made.
Since a custom portfolio is “custom”, there is actually no need to restrict ourselves to the custom portfolio’s main function. Yes, you can twit it to your own liking and needs since it does not really mean anything other than viewing pleasures. Here are some ways investors can play around with their custom portfolio.

1. A Beginner’s Stock Simulator
We can always add companies that we did not actually purchased into our portfolio to simulate your own performance before going into the real market. This is one of the simplest alternative usages of our custom portfolio but also the least beneficial to our real earnings since no real money is involved.

2. Recording Target Entry Prices
Buying low helps maximizes our profits and provides us a safety margin but it can take years to reach one’s target entry price. As there are a great number of stocks to track, it will be good to list down each price that we are willing to enter after your research has enrolled them into your target list. In this manner, there is no need to remember the target entry prices of each of the target companies in your list. By setting target entry prices as your fake buying prices into your custom portfolio, you will get a full list of “green” and paper wins since your target prices are lower than the current market prices. Thus, you will only finally reach your target prices every time the number reaches the zero paper loss/win.
Example: Your entry TP is $1 and the current market price is $1.10. You aim to own 1000 shares. You set your fake buying price as $1 in your custom portfolio instead. Thus, it will show an artificial paper earnings of $100 ($0.10X1000). When its market price finally drops to $1, your portfolio will show an artificial paper earnings of $0, signifying and reminding you that it is your moment to buy your shares.

3. Setting Target prices to take profit /stop losses
There are two scenarios in this topic. It is easy for us to say that we will sell our shares only when it reaches a certain price. There are however times when temptations of taking paper profits get to us. As for paper losses, one may not be able to admit their mistake and stop their losses.
Since taking profits and stopping losses are exactly opposite of each other, we will use taking profit as an example.
Example: You bought a company’s shares at $2 and your target price to sell them is $3.20, taking it you own 1000 shares. Instead of setting $2 as your buying price in your customs portfolio, you set it as $3.20 (your target to sell). This way, it will appear as if you are losing a paper loss of $1200 ($1.20 X 1000) in your customs portfolio when the market price is still $2. The main objective of this is to remind you to only sell when the artificial paper loss finally reaches the $0 mark. This signifies that you can finally sell at your desired yet realistic target price. Of course, what you decide to do otherwise when your target is finally reached is in your control.