A grouping of financial assets such as stocks, bonds and cash equivalents, as well as their mutual, exchange-traded and closed-fund counterparts. Portfolios are held directly by investors and/or managed by financial professionals.


Prudence suggests that investors should construct an investment portfolio in accordance with risk tolerance and investing objectives. Think of an investment portfolio as a pie that is divided into pieces of varying sizes representing a variety of asset classes and/or types of investments to accomplish an appropriate risk-return portfolio allocation.

For example, a conservative investor might favor a portfolio with large cap value stocks, broad-based market index funds, investment-grade bonds and a position in liquid, high-grade cash equivalents. In contrast, a risk loving investor might add some small cap growth stocks to an aggressive, large cap growth stock position, assume some high-yield bond exposure, and look to real estate, international, and alternative investment opportunities for his or her portfolio.

  1. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment is made with the ...
  2. Market Portfolio

    A theoretical bundle of investments that includes every type of asset available ...
  3. Portfolio Plan

    An investment strategy applied to a personal or corporate portfolio that determines ...
  4. Asset Allocation

    An investment strategy that aims to balance risk and reward by apportioning ...
  5. Portfolio Manager

    The person or persons responsible for investing a mutual, exchange-traded or ...
  6. Portfolio Insurance

    1. A method of hedging a portfolio of stocks against the market risk by short ...
  7. Portfolio Income

    Income from investments, dividends, interest, royalties and capital gains. Portfolio ...
  8. Style Drift

    The divergence of a mutual fund from its stated investment style or objective. ...
  9. Alpha Generator

    Any security that, when added to an existing portfolio of assets, generates ...
  10. Average Effective Maturity

    For a single bond, it is a measure of maturity that takes into account the possibility ...
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