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Investment Dictionary


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Investment Portfolio

 

An investment portfolio is a composition of different investments made on purpose to achieve the highest return at predetermined risk level. Investment portfolio can include all kinds of investments: stocks, bonds, funds, real estate, property, commodities, derivatives, currencies and other. 

 

Well diversified portfolio may achieve better investing results than one separate investment because of different correlation between different assets. Diversification between asset classes, between continents and countries, between sectors can lower the volatility of the portfolio and keep the same return rate.

 

Portfolio may be single or divided in other smaller sub-portfolios that are managed differently, but such separation is only theoretical as long as owner of the portfolios is the same. But the cases when one portfolio is owned by many investors are also possible. For example in case of a mutual fund, when one investment fund which is also a portfolio, can be owned by thousands or millions retail investors but managed by one investment management company.

 






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