In finance, a
is an appropriate mix of or collection of investments held by an institution or a private individual.Holding a portfolio is part of an investment and risk-limiting strategy calleddiversification. By owning several assets, certain types of risk (in particular specific risk) can be reduced. The assets in the portfolio could include
, production facilities, or anyother item that is expected to retain its value.In building up an investment portfolio a financial institution will typically conductits own investment analysis, whilst a private individual may make use of theservices of a financial advisor or a financial institution which offers portfoliomanagement services.
Meaning of Portfolio:
Portfolio means combined holding of many kinds of finanacial securities i.e.shares, debentures, government bonds, units and other financial assets. Making a portfolio means putting one’s eggs in different baskets with varying elementsof risks and return. The object of portfolio is to reduce risk by diversificationand maximise gains.
The term investment portfolio refers to the various assets of an investor which areto be considered as a unit. Thus, an investment portfolio is not merely a collection