What Does Portfolio Mean?
A portfolio is just a fancy word for all the investments you own. It’s like a collection or a group of your stocks, bonds, mutual funds, ETFs, and any other financial assets you have. Instead of just owning one stock, your portfolio shows everything you’ve invested in, all in one place.
Why Have a Portfolio?
Having a portfolio is important because it helps you keep track of your investments. When you own different kinds of investments, it’s easier to see how your money is doing overall. If one investment is not doing well, you might have others that are doing better, so your whole portfolio balances out.
Different Kinds of Portfolios
Not everyone’s portfolio looks the same. Some people have a portfolio full of stocks because they want to grow their money fast and are okay with more risk. Others might have a lot of bonds or cash to keep things safer. Your portfolio depends on your goals, how much risk you can handle, and how long you plan to invest.
Why Does Diversification Matter?
One big reason to have a portfolio with different types of investments is diversification. That means spreading your money across different assets so you don’t put all your eggs in one basket. If one investment loses value, the others can help protect you from losing too much money.
How to Build Your Portfolio
Building a portfolio starts with knowing your goals and how much risk you’re willing to take. Then you pick investments that fit that plan. Over time, you might add or sell some investments to keep your portfolio balanced and working for you.
