Core Holding

AAA

DEFINITION of 'Core Holding'

A long-term investment that forms the foundation of an investor's portfolio. A common core holding strategy is to primarily own an investment that tracks the overall market, such as an S&P 500 index fund, and secondarily own investments that may deviate from the overall market, such as individual stocks. These secondary investments are called satellite holdings. A solid core holding gives an investor the flexibility to take a chance with riskier investments in other areas of the portfolio.

INVESTOPEDIA EXPLAINS 'Core Holding'

A properly constructed core/satellite portfolio will tend to outperform a portfolio consisting solely of individual stocks, since most investors are poor at assembling a properly diversified portfolio from stocks alone. A core/satellite strategy also results in a portfolio that is easy to monitor and rebalance because it only contains a few investments. The strategy minimizes volatility, which limits the negative effect of taxes and trading commissions on returns.

RELATED TERMS
  1. Core Assets

    An essential, important or valuable property of a business without ...
  2. Core Deposits

    The deposits made in a bank's natural demographic market. Banks ...
  3. Core Earnings

    The revenue derived from a company's main or principal business, ...
  4. Core Plus

    A fixed-income investment management style that permits managers ...
  5. Long-Term Assets

    1. The value of a company's property, equipment and other capital ...
  6. Marquee Asset

    A company's most prized asset, one that is a highly visible symbol ...
Related Articles
  1. Investing Basics

    Choose Your Own Asset Allocation Adventure

    There are many strategies to help balance your portfolio. Here are a few to get you started.
  2. thinkstock|ingram pic
    Mutual Funds & ETFs

    A Guide To Core-Satellite Investing

    Find out how this approach reduces risk and costs so you can maximize your portfolio's return.
  3. Investing Basics

    Long-Term Investing: Hot Or Not?

    Forget the latest craze - you're more likely to succeed with a buy-and-hold strategy.
  4. Trading Strategies

    10 Tips For The Successful Long-Term Investor

    These guiding principles will help you avoid common folly during the decision-making process.
  5. Investing Basics

    Online Portfolio Management, DIY or Fee-Based Financial Advisor: Which Is Right For You?

    Should you use an online financial planning service, or do professional, fee-based financial planners justify their higher costs?
  6. Chart Advisor

    A Total Stock Market ETF For Any Portfolio

    Utilizing index funds and ETFs, such as Vanguard's VTI, is one of the best ways for the average investor to track the broad markets and minimize fees.
  7. A Monte Carlo simulation allows analysts and advisors to convert investment chances into choices. The advantage of Monte Carlo is its ability to factor in a range of values for various inputs.
    Fundamental Analysis

    What Can The Monte Carlo Simulation Do For Your Portfolio?

    A Monte Carlo simulation allows analysts and advisors to convert investment chances into choices. The advantage of Monte Carlo is its ability to factor in a range of values for various inputs.
  8. Chart Advisor

    Charts To Watch As Fed Raises Rates

    Weekly technical summary of the major U.S. indexes.
  9. Fundamental Analysis

    How do I judge a mutual fund's performance?

    Evaluate mutual fund performance utilizing resources such as Morningstar; compare the fund with others in its peer group to find the best mutual fund for you.
  10. Strategic asset allocation is a portfolio strategy that involves setting target allocations.
    Bonds & Fixed Income

    Strategic Asset Allocation

    Strategic asset allocation is a portfolio strategy that involves setting target allocations for various asset classes, then periodically rebalancing the portfolio back to the original allocations ...

You May Also Like

Hot Definitions
  1. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  2. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  3. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  4. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  5. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
Trading Center