invest all funds into a single instrument of capital appreciation has always been considered very risky.It is much more stable and better distribute the funds in different directions so that losses in one area offset by higher income in another.The practical implementation of this idea is an investment portfolio.In fact, it is the totality of the financial and real investment.If we talk about the stock market, in the narrow sense this term mean absolutely all securities regardless of the type, duration and liquidity owned entity or person acting as a holistic facility management.
What happens portfolio
Each investor among its priority risk, profitability and liquidity of investments.Depending on the ratio of these factors, it is possible to allocate the portfolio growth, income and mixed, it is reasonable to combine both these areas.They each have their own purpose and features.Thus, the investment portfolio of growth aimed at maximizing income in the long term.In this case, the investor refuses to high-yield areas, income in a short period of time.The basis of this book, as a rule, make paper, showing stable growth, and its goal - to increase the capital by increasing the market value of such assets.At the same dividends play a secondary role.Investment portfolio income, by contrast, aims to maximize the profit from each transaction and is designed for maximum profitability in the short term.In this case, long-term paper is not critical and decisive criterion in selecting securities becomes high current income, including due dividend and interest payments.The risk of an investment portfolio in this case is much higher than the previous version.These two species are an extreme, is relevant only in specific cases and under certain circumstances.Ideally, of course, form a balanced portfolio, or as it is called, portfolio growth and income.His goal - the optimal combination of profitability and risk.
Selecting investment instruments
Regardless of the type of portfolio diversification is recommended to use everywhere.On different paper affects a huge number of factors, and keep track of all of them is impossible.Therefore, the concept of an investment portfolio requires a reasonable allocation of resources between different types of financial instruments.After selecting an asset class it makes sense to distribute the funds among different types of securities belonging to this class.For example, if the government decided to focus on the energy sector, instead of buying the entire capital market a clear leader, it is better to buy a few shares of companies operating in this field.Another option is to choose diversification securities with different terms of payment of dividends.This will make the reinvestment in assets whose value went up significantly.
Periodic audits
at least once a year to do a comprehensive analysis and evaluate current assets and, if necessary, adjust the ratio of assets.First, it is important to learn how to achieve the goals set in terms of the long-term as well as experience, when there is a sense of confidence in the forecasts, you can adjust the portfolio and more.
Reinvestment
Regular investing part of the profits into assets capable of greatly increased capital.Thus, instead of a large contribution at the end of the annual period is better to invest 1/12 of that amount on a monthly basis.Although it is quite possible to make large investments if they are at the moment, but the situation requires rapid action.
