Investment portfolio could be defined as a pool of different investments by which an investor bets to make profit while aiming to preserve his invested amount at the same time. The diversity of the investments in an investing portfolio depends upon the investors estimates of both risks and returns. They can either invest in stocks having low risk with low reward or in stocks having high risk with high reward. The decision of investment as well as the investment pattern of an investor depends upon his basic nature as well the amount of capital he wants to invest.
Types of investment portfolio:
There are mainly three types of investment.
The financial specialist having tolerant portfolio generally puts resources into organizations that give him/her consistent returns regardless of what the economic situations are. The financial specialists with such speculation portfolio hold their venture for a more extended period.
The investors with aggressive portfolios invest in risky stocks that could earn him high profit and their investments are mainly in rapidly growing companies. The main feature of their investment is it keeps on changing and experiences big turnovers over time.
The conservative investment can be seen of the investors who always invest with an eye on the yield. They also take into account growth of the company as well as dividends offered. Based on this they take their investment decision.
Managing investment portfolio:
For your investment portfolio working the best, you need to ably manage it. Below mentioned are some of the points that would help you to manage your investment portfolio better:
- You should never keep worrying about the performance of your every investment. There would be some that may be giving you bad returns at that point of time, but you have to forget about it and focus on the performance of your investment portfolio as a whole.
- You should have patience no matter how worse the situation turns and should always keep your focus on the eventual gains.
- You should always stick to your strategy while taking minimum risk and should not deviate from your investment plan hearing any rumor.
- Your stock investment should be diversified so that if you face loss in one or two profile it could be compensated. For example you can invest in small stocks, real estate’s investment trusts and in foreign stocks, but the investment should not be big.
- You should always adopt value-oriented and diversified approach and should not invest money in stocks that you may need immediately.
- You should not rebalance your portfolio often, give it some stability and don’t take the things for granted taking its history into account.
- You should not fill your portfolio with fashionable stocks as it will not gain you much profit.
Successful investment portfolio:
For successful investment portfolio, you need to have sound investment strategy. There are mainly two types of strategies that are adopted by the people. One is passive portfolio strategy and the other is active portfolio strategy. In passive portfolio investment strategy the investor has minimum expectations from his investments and depends upon diversification on investment to match market index, while in active investment portfolio strategy the investor uses available information and forecasting techniques to seek a better performance.