An investment portfolio is that combination of financial assets in which a basket of financial assets is deposited with the idea of generating a surplus value. It is also known as a portfolio.
More widely, we call the investment portfolio or portfolio of securities to that set of assets in which we have invested money in a diversified way , that is, it is the basket of assets in which we are invested.
These assets can be of a fixed nature, if we invest in fixed income or equities , if we decide to invest in assets of variable nature, which are the vast majority of financial assets (stock market, investment funds , etc.). Naturally there are mixed investment portfolios, which are composed of the two previous types.
Contrary to popular belief, a portfolio is not only composed of publicly traded shares , but of all types of assets, from investment funds, stock market or foreign exchange rates and raw materials.
Composition of an investment portfolio
The composition of a portfolio is derived based on the profile of the investor, being able to be conservative, medium or risky, depending on the risk and volatility that the investor is willing to assume. And also on the composition of the portfolio of securities or investment will depend the final profitability that we obtain, based on the proportionality of the weight of each asset in the portfolio.
We can distinguish two types of portfolio based on the temporality of the assets:
- Loan portfolio: It is one in which we keep the investment for a long time, aimed at achieving long-term profitability.
- Debt portfolio: If we decide to invest in short-term assets, so called because they generally borrow to quickly buy and sell the assets.
Example of a portfolio of shares
In investment portfolios there can be very different types of assets such as bonds, futures, investment funds, cfds and stocks, among other financial assets. But it can also consist of only one type of asset. For example, this would be a portfolio composed only of shares: