Portfolio is a group of financial assets, such as stocks, bonds, commodities, currency and cash equivalents, and their fund counterparts, including mutual funds, exchange-traded funds and closed-end funds, which is also the focus of the basic knowledge of stock introduction. Portfolio can also include privately traded securities, such as real estate, art and private investment. Portfolio is directly held by investors and/or managed by financial professionals and fund managers. Investors should build their investment portfolio according to their risk tolerance and investment objectives. Investors can also own various portfolios for various purposes. It all depends on the goal of an investor.

Portfolio can be regarded as fragments with different sizes, representing various asset classes and/or investment types, so as to realize appropriate risk-return portfolio allocation. Many different types of securities can be used to build a diversified portfolio, but stocks, bonds and cash are usually regarded as the core components of the portfolio. Other potential asset classes include, but are not limited to, real estate, gold and currency.

Influencing factors of portfolio analysis

Risk tolerance: Although financial advisers can develop a general portfolio model for individuals, investors' risk tolerance should have a significant impact on the appearance of the portfolio. This is also the focus of the fund management method.

For example, conservative investors may prefer to have a portfolio of large-cap stocks, extensive market index funds, investment-grade bonds and liquid senior cash equivalents. In contrast, investors with strong risk tolerance may increase some small-cap growth stocks to aggressive large-cap growth stocks, assume some high-yield bond risks, and seek real estate, international and alternative investment opportunities for their portfolios. Generally speaking, investors should minimize the risk exposure of securities or asset classes to make them uneasy.

Time span: Similar to risk tolerance, investors should consider how long it will take to build a portfolio. As the target date approaches, investors should usually turn to more conservative asset allocation to protect the principal of the portfolio established so far. When choosing the investment to fill the portfolio, we should consider the risk tolerance and time range.

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