Hi,
moomoo ID:0
Log Out
English
Back
Log in to access Online Inquiry

What Is An Investment Portfolio

Views 74872022.09.21
https://courseimg.futunn.com/202206300000032323478fd2c18.png

Key Takeaways

  • An investment portfolio is about diversified investment strategies.

  • Diversified portfolios can better weather ups and downs in the markets.

  • Risk tolerance is the priority concern while creating a personalized investment portfolio.

Understanding an investment portfolio

When you start to learn investing, you've probably heard a saying— "Don't put all your eggs in one basket. "

Broadly speaking, it's the simplest explanation for investment portfolios.

To be more accurate, an investment portfolio refers to a basket of assets, which may consist of such assets categories as cash, gold, stocks, options, bonds, funds, commodities, etc.

The underlying reason for portfolio investment is to maximize returns while minimizing risks. When building your own portfolio, you are diversifying the investment. The diversification can take place across different asset categories as well as within a certain category.

Features

  • Diversified

Investment portfolios are a collection of assets, which is a display of diversified allocation. Diversification means distributing your capital into different investments, which is a common risk management strategy. Securities, gold, bonds, businesses, and real estate are frequently chosen by investors.

  • Hedging

A diversified portfolio tends to be less closely correlated across asset classes. For example, when the stock market endures huge volatility, gold prices usually go higer driven by investors' hedging demand. If there is a portion of gold in your portfolio, loss in stock markets could be partly mitigated.

  • Personalized

A healthy investment portfolio could help you ride out the ups and downs of markets. However, building an investment portfolio should be based on your own considerations. Risk tolerance and time horizons are the main concerns, which means how much loss you could bear and your expectation for the return cycle if your portfolio doesn't perform well while the broad market is on a downward trend.

Investment portfolios come in various types corresponding to their investing strategies. For example, if you are reserving funds for your children's education, you can't take too many risks, so a conservative portfolio is a better choice for you. If you have abundant extra money and have a strong risk tolerance, you may prefer constructing an aggressive strategy to seek greater gains.

Example

Specifically, suppose you have a $1,000 investment fund. You might spend $500 on buying stocks, such as $Apple(AAPL.US)$, $Costco(COST.US)$, $NVIDIA(NVDA.US)$, from different sectors. Furthermore, you are positive about the electric vehicle industry for it seems like a disruptive business with huge potential.

However, you are not familiar with the industry chain, only knowing that Tesla is a game-changer. You could purchase $200 sector ETFs to grab the momentum. You also put $100 in government bonds which are closely related to inflation and interest rates. Besides, you set $200 aside to wait for a chance to buy at the bottom. In this case, your investment portfolio consists of stocks (50%), funds (20%), bonds (10%) and cash (20%). 

Trade like a pro with moomoo

Get free stock and start your professional trading today

Terms and conditions apply right-arrow

This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose of the above content.

Moomoo is a financial information and trading app offered by Moomoo Technologies Inc.

In the U.S., investment products and services available through the moomoo app are offered by Moomoo Financial Inc., a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and a member of Financial Industry Regulatory Authority (FINRA)/Securities Investor Protection Corporation (SIPC).

In Singapore, investment products and services available through the moomoo app are offered through Moomoo Financial Singapore Pte. Ltd. regulated by the Monetary Authority of Singapore (MAS). Moomoo Financial Singapore Pte. Ltd. is a Capital Markets Services Licence (License No. CMS101000) holder with the Exempt Financial Adviser Status. This advertisement has not been reviewed by the Monetary Authority of Singapore.

In Australia, financial products and services available through the moomoo app are provided by Futu Securities (Australia) Ltd, an Australian Financial Services Licensee (AFSL No. 224663) regulated by the Australian Securities and Investment Commission (ASIC). Please read and understand our Financial Services Guide, Terms and Conditions, Privacy Policy and other disclosure documents which are available on our websites https://www.futuau.com and https://www.moomoo.com/au. Moomoo Technologies Inc., Moomoo Financial Inc., Moomoo Financial Singapore Pte. Ltd. and Futu Securities (Australia) Ltd are affiliated companies.

Recommended