Investment Portfolios: The What and How Part 1

An investment portfolio is simply a collection of all assets you own as an investor. These assets could be stocks, bonds, real estate or even crypto.
Building a portfolio may seem like a lot of work but we will show you with this article series how to build an investment portfolio quite easily. The good news is that you can build an investment portfolio no matter how engaged or disengaged you plan to be, you could very well outsource the task too. But first, what are the different types of investment portfolios?
Types of Investment Portfolios
There are five major kinds of investment portfolios; each depends on the amount of risk you’re willing to take and financial goals you set. The types of investment portfolio include:

This is the ideal portfolio for individuals with a lot of time and high-risk appetite. Investments under the aggressive portfolio are high-risk investments that have high return potential. An example of assets like this includes high beta stocks, they are highly volatile.

This portfolio is also ideal for investors with high-risk appetites. It involves speculating what assets will do well and investing in those. However, we generally advise investors to have only about 10% of their investment funds in these kinds of assets. An IPO (Initial Public Offering) of a new tech company is an example of this kind of asset.

This portfolio kind is ideal for investors with a low-risk tolerance. These kinds of investors invest in the stocks of companies that they are certain will be in business for a very long time, especially if these companies produce daily human necessities or have left an indelible mark in the market.

This type of portfolio has one objective and that is to keep generating positive cash flow for steady income. It could be a stock that regularly pays dividends, thus keeping income steady. This is great as a retirement income and can be the ideal income supplement to an investor’s salary.

As the name implies, the hybrid portfolio involves a combination of different kinds of assets; high-risk, low-risk and even regular income assets. This means that one portfolio can include bonds, mutual bonds, real estate, stocks, art, crypto, commodities, etc. The advantage of the hybrid portfolio is that it gives a ton of flexibility and helps balance out the negative impact that losses from one asset may bring.
It is important to build an investment portfolio because it gives you the opportunity to put your investments under control and give it a proper structure with financial targets, thus making you more intentional about your investments.
It’s okay if you do not have enough time to investigate all of this or if you have no idea where to begin your building of an investment portfolio. In our next article, we’ll show you the exact steps to take to begin building your portfolio, so look out for it.
If you have any questions or need some guidance with your investment decisions, do not hesitate to contact us. Also, to keep receiving helpful investment info, subscribe to our newsletters at www.forwardedgeconsulting.com