Copy Paste Experiment: Learn How to Build a Winning Portfolio

In Unit 3, we discussed basic security types such as stocks, bonds, ETFs, REITs, and mutual funds. When you have a few of these investments under your belt, you have begun the process of building a portfolio.

A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, as well as their funds counterparts, including mutual, exchange-traded and closed funds. You can manage your own portfolio, or you can hire financial professionals to do it for you.

In investing, knowing yourself is as important as knowing the rules. You should construct an investment portfolio in accordance with your risk tolerance and investment objectives.

What constitutes a good portfolio is a very subjective area and matter of great debate. Think of a portfolio as a pie containing all your investments. Everyone agrees a pie should have a crust and some kind of filling, but that's the only universal commonality. People have lots of different opinions about what makes a good pie: Some prefer more crust and less fruit filling; some swear by lard for making pie crust, while others insist butter is the best. None of these views are wrong, and it's the same with an investment portfolio. The only way to determine which kind of portfolio (or pie!) is best for you, is to read as many different opinions on portfolios as you can and try as many options as you can until you find your sweet spot, read on.

The Risk/Return Tradeoff

The risk/return tradeoff is the balance between the desire for the lowest possible risk and the highest possible return. Read More

Diversification

Many individual investors can't tolerate the short-term fluctuations in the stock market. Diversifying your portfolio is the best way to smooth out the ride. Read More

Dollar Cost Averaging

Although the term might imply a complex concept, DCA is actually a fairly simple and extremely useful technique. Read More

Asset Allocation

The underlying principle of asset allocation is that the older a person gets, the less risk he or she should take on. Read More

5 Popular Portfolio Types

Learning how to build these portfolios will increase your investing confidence and give you financial control. Read More

Investment Fees: How to Understand and Manage Them

There can be a variety of fees levied when investing. Here's a look at what they are and how to manage them. Read More

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