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Stock Portfolio

A group of stocks owned by an investor is called a stock portfolio. Stocks and bonds are usually the core constituents of each investor’s portfolio, but it can also include other assets like gold, cryptocurrencies, commodities, real estate investment trusts, etc.

A stock portfolio, in particular, is only comprised of shares of publicly-traded companies. Traders tend to organize a stock portfolio that includes companies from different sectors as diversification helps investors to have more resilient portfolios. For instance, if the tech sector is surging, other, more defensive, sectors tend to underperform.

When building a stock portfolio, traders should first identify goals and set a timeline. Typical stock portfolios are growth, conservative, and income portfolio, depending on the risk-reward. A growth portfolio is built to outperform the wider stock market but it also comes with a higher degree of risk.

An income portfolio tends to focus on value stocks that can generate returns from dividends, as well as from capital gains. Finally, the conservative portfolio is designed to protect the principal value of your portfolio.

Some experts advise young investors to include a large number of different companies in their portfolios to minimize risks while others are in favor of a smaller and leaner portfolio e.g. tech-focused stock portfolio. 

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Author: Mircea Vasiu Updated: July 8, 2022