{"id":5024,"date":"2021-10-06T19:02:02","date_gmt":"2021-10-06T13:32:02","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=5024"},"modified":"2022-11-23T14:50:29","modified_gmt":"2022-11-23T09:20:29","slug":"portfolio-investment","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/","title":{"rendered":"What Is Portfolio Investment &#8211; 2022 Guide On How To Build Your Portfolio"},"content":{"rendered":"\n<p>Managing money can be very cumbersome and risky, portfolio investment, even more so. It is paramount to consider factors such as risk, portfolio size, and funds available at disposal. So, how can one build an effective investment portfolio? What are the types and what should be kept in mind while selecting an asset and allocating resources?&nbsp;<\/p>\n\n\n\n<p>Let us find out!<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#What-is-portfolio-investment\" title=\"What is portfolio investment?\">What is portfolio investment?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#General-portfolio-classification\" title=\"General portfolio classification\">General portfolio classification<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#Growth-oriented-portfolio-investments\" title=\"Growth-oriented portfolio investments\">Growth-oriented portfolio investments<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#Income-portfolio\" title=\"Income portfolio\">Income portfolio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#Value-investment-portfolio\" title=\"Value investment portfolio&nbsp;\">Value investment portfolio&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#Types-of-portfolio-investment\" title=\"Types of portfolio investment&nbsp;\">Types of portfolio investment&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#Risk-free-portfolios\" title=\"Risk-free portfolios&nbsp;\">Risk-free portfolios&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#Low-risk-portfolios\" title=\"Low-risk portfolios&nbsp;\">Low-risk portfolios&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#Medium-risk-portfolios\" title=\"Medium-risk portfolios&nbsp;\">Medium-risk portfolios&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#High-risk-portfolios\" title=\"High-risk portfolios\">High-risk portfolios<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#Things-to-keep-in-mind-while-building-a-portfolio-investment\" title=\"Things to keep in mind while building a portfolio investment&nbsp;\">Things to keep in mind while building a portfolio investment&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#Advantages-of-portfolio-investment\" title=\"Advantages of portfolio investment&nbsp;\">Advantages of portfolio investment&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.tickertape.in\/blog\/portfolio-investment\/#Summary\" title=\"Summary\">Summary<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"what\"><span class=\"ez-toc-section\" id=\"What-is-portfolio-investment\"><\/span><strong>What is portfolio investment?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A portfolio investment is a method of making strategic investments. A portfolio investment is a combination of stock, bond, and\/or other financial <a href=\"https:\/\/www.tickertape.in\/blog\/financial-instruments\/?utm_source=blog&amp;utm_medium=article\">instruments<\/a> (for example currencies, cash and currency equivalents, and <a href=\"https:\/\/www.tickertape.in\/blog\/commodity-in-economy\/?utm_source=blog&amp;utm_medium=article\">commodities<\/a>) purchased intending to make a profit from increase in value over time.&nbsp;<\/p>\n\n\n\n<p>It implies asset ownership that is passive, as opposed to direct investing, which requires active management.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"general\"><span class=\"ez-toc-section\" id=\"General-portfolio-classification\"><\/span><strong>General portfolio classification<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Portfolios are classified into several kinds based on their investing methods.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Growth-oriented-portfolio-investments\"><\/span><strong>Growth-oriented portfolio investments<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A growth portfolio&#8217;s goal is to accumulate large profits by accepting larger risks. Growth-oriented investments frequently entail investing directly or in listed stock of younger companies with greater growth potential than well-established organizations.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Income-portfolio\"><\/span><strong>Income portfolio<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>An income portfolio aims at building a large corpus over time through capital appreciation led by interest income and debt rather than aiming at stock appreciation.<strong> <\/strong>A portfolio of low-risk <a href=\"https:\/\/www.tickertape.in\/blog\/government-securities\/?utm_source=blog&amp;utm_medium=article\">government bonds<\/a> and stocks that pay heavy dividends constitute an income portfolio. The goal of income-focussed portfolio investments is to generate regular income from investments.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Value-investment-portfolio\"><\/span><strong>Value investment portfolio&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>An investor in a value portfolio takes advantage of undervalued assets to create a high-quality portfolio of investments. Investors look for profit potential firms that are priced below their fair <a href=\"https:\/\/www.tickertape.in\/blog\/market-value\/\">market value<\/a> to benefit later. Most value investors have a long time horizon for portfolio investment.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"types\"><span class=\"ez-toc-section\" id=\"Types-of-portfolio-investment\"><\/span><strong>Types of portfolio investment&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The risk element in a portfolio has a direct relationship with investment returns.&nbsp;<\/p>\n\n\n\n<p>Investing in high risk and low-risk assets have their pros and cons. For example, when one invests in high-risk assets, the potential to profit is high, but the risk is also large. On the contrary, low-risk assets may be safer but fare poorly on returns. As a result, each investor will have a unique demand that may be met with the help of a type of portfolio.&nbsp;<\/p>\n\n\n\n<p>That said, there are many types of portfolios that may be created according to the requirements of the investor. The following are the most popular forms of portfolio investments:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Risk-free-portfolios\"><\/span><strong>Risk-free portfolios<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Risk-free portfolios contain risk-averse investment instruments such as government bonds and other low-risk investments with very low returns.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Low-risk-portfolios\"><\/span><strong>Low-risk portfolios&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A portfolio that consists mostly of risk-free assets, with some risk-based securities thrown in to provide a mix of low-risk and excellent returns.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Medium-risk-portfolios\"><\/span><strong>Medium-risk portfolios&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A portfolio that contains more risk-free securities than a high-risk portfolio but less risk-based assets than a high-risk portfolio.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"High-risk-portfolios\"><\/span><strong>High-risk portfolios<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This form of investment portfolio has a large number of high-risk assets with higher returns.<\/p>\n\n\n\n<p><strong><em>Note<\/em><\/strong>:<\/p>\n\n\n\n<p><em>The mix of assets in a portfolio may be influenced by a variety of factors, including the investment horizon, the risk tolerance of the investor, and the amount of money invested.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"mind\"><span class=\"ez-toc-section\" id=\"Things-to-keep-in-mind-while-building-a-portfolio-investment\"><\/span><strong>Things to keep in mind while building a portfolio investment&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An investor or financial manager should follow the given steps below to build a solid investment portfolio.<\/p>\n\n\n\n<ul><li><strong>Portfolio&#8217;s goal: <\/strong>To obtain direction on what investments to make, investors should address the question about the goal of the portfolio. It must be in sync with the risk profile and financial objectives of the investor.<\/li><li><strong>Investment horizon: <\/strong>Some investors seek to purchase and sell stocks repeatedly in a relatively short period of time. They should keep in mind that this raises transaction expenses. Furthermore, most investments pay well in the long term. That said, the choice of assets is also dependent on the time horizon the investor has to achieve their financial goals.<\/li><li><strong>Asset valuation: <\/strong>Given the enormous diversity of possible assets to include in a portfolio, investing may be a daunting prospect. It is important to know how much value each asset in a portfolio must hold.&nbsp;<\/li><li><strong><a href=\"https:\/\/www.tickertape.in\/blog\/mitigating-portfolio-risk-through-diversification\/\">Diversification<\/a>: <\/strong>Diversifying investments is the key to a successful portfolio. Having a varied portfolio can help <a href=\"https:\/\/www.tickertape.in\/blog\/mitigating-portfolio-risk-through-diversification\/?utm_source=blog&amp;utm_medium=article\">mitigate risk<\/a> and provide prospects of better returns.&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"advantages\"><span class=\"ez-toc-section\" id=\"Advantages-of-portfolio-investment\"><\/span><strong>Advantages of portfolio investment&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The portfolio investment can be used to meet an individual&#8217;s risk profile. It allows the individual to manage his or her own risk profile.<\/li><li>Individuals can diversify their investments in a variety of ways keeping their risk appetite in mind.<\/li><li>Portfolio of assets can assist a consistent flow of income. Dividends are not paid on all stocks. Some stocks pay <a href=\"https:\/\/www.tickertape.in\/blog\/ex-dividend-rate\/?utm_source=blog&amp;utm_medium=article\">dividends<\/a>, while others are growth investments. If an investor&#8217;s needs for an investment fall somewhere in the middle, they can <a href=\"https:\/\/www.tickertape.in\/blog\/why-should-you-prioritise-investing\/\">invest<\/a> in a portfolio that allows them to benefit from both dividends and <a href=\"https:\/\/www.tickertape.in\/blog\/is-it-right-to-pay-a-higher-price-for-a-growth-stock\/\">growth stocks<\/a> to generate income as well as for capital gains.<\/li><li>Investing in different assets necessitates minimal management. This will lower the transactional cost of investing and will help <a href=\"https:\/\/www.tickertape.in\/blog\/5-simple-lifestyle-changes-to-save-more\/\">save money<\/a> in the long run.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Summary\"><\/span><strong>Summary<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><a href=\"https:\/\/www.tickertape.in\/blog\/portfolio-management\/\">Portfolio management<\/a> is a herculean task. Active portfolios require constant monitoring unlike passive portfolios. When making portfolio investments, risk tolerance and time horizon are critical factors to be taken into consideration.<\/p>\n\n\n\n<p>If you are new to investing, you can get started this Diwali during the auspicious Muhurat Trading session. You can begin by investing in <a href=\"https:\/\/www.tickertape.in\/blog\/smallcases-to-look-forward-to-in-2023\/\">smallcases<\/a>, that are expert-managed portfolios for novice investors looking to build long-term wealth. Stay tuned to <a href=\"https:\/\/www.tickertape.in\/blog\/?utm_source=blog&amp;utm_medium=article\">Blog by Tickertape<\/a> for more information on Muhurat Trading.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A portfolio investment is a method of making strategic investments. It is a combination of stocks, bonds, and\/or other financial instruments purchased to make a profit from increase in value over time.<\/p>\n","protected":false},"author":54,"featured_media":4912,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[1769],"tags":[],"acf":[],"modified_by":"Aradhana Gotur","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/10\/13.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/5024"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/54"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=5024"}],"version-history":[{"count":6,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/5024\/revisions"}],"predecessor-version":[{"id":11139,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/5024\/revisions\/11139"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/4912"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=5024"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=5024"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=5024"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}