PORTFOLIO

DIVERSIFICATION
S LODHI
 WHAT IS A PORTFOLIO?
Single investment
mixing stocks/bonds

Mutual
A special type of loan Highly-liquid investments
Funds
Money
Bonds
Markets

Ownership in a company Used for saving

YOUR Savings
Stocks PORTFOLIO Accounts

The collection of investments you personally hold.

 WHAT IS DIVERSIFICATION?

Diversification is
owning a collection
of investments in
order to spread risk
and have a safer
investment overall.
 WHAT IS DIVERSIFICATION?

Diversification is
owning a collection
of investments in
order to spread risk
and have a safer
investment overall.
 TYPES OF MARKETS

Bear Market = slow market Bull Market = growing market

Bonds and money markets do well. Stocks do well.

 HOW DO I DIVERSIFY?

1. Know your own style

How much do you know about investing?
Do you like to take risks?

2. Research
What investment options are available to you?

3. Figure out your time horizon

How long do you have to invest before you need your
money?

4. Practice
Use Wall Street Survivor and the Virtual Business Sims
before it’s your own hard-earned money on the line!
 STEP 1 – KNOW YOUR STYLE
• How much do you know about investing?
• Beginner, Intermediate or Advanced?

• Do you like to take risks?

• Take the investment risk tolerance quiz.
 STEP 2 - RESEARCH

Large Cap Mid Cap Small Cap

$5 billion $1 billion $1 billion
or to or
more $5 billion less

Less Risk More Risk

 STEP 3 – TIME HORIZON

Short Horizon Intermediate Horizon Long Horizon

<1 year 1-9 years 10+ years

Bonds Money Markets Stocks

Less Risk More Risk

 STEP 4 - PRACTICE

1. Portfolio Check 1
a. List your risk tolerance
b.At least 95% invested in stocks
c. At least 7 sectors
d.No more than 30% in any one sector
e. Proper mixture of large capitalization and small
capitalization stocks for your risk tolerance
 PORTFOLIO CHECK 1
Total $
Investment Symbol Sector Capitalization
Invested

$1,000 to No more Must match

$5000 in 7
At least
than 30% your risk
Cash sectors
of portfolio tolerance.
 WAYS TO BECOME A YOUNG
SAVER
• Upwork
• Fiver
• Linkedin profiles
• Researches
• Organizations
• Facebook(good purpose)