Short definition: A portfolio is a collection of investments held by an individual or organization.
Explanation: It can include a variety of assets, such as stocks, bonds, real estate, commodities, and cash equivalents. The purpose of a portfolio is to spread risk and potentially increase returns by diversifying investments across different asset classes and industries.
Example: An individual’s investment portfolio might include a mix of stocks, bonds, and mutual funds, while a company’s portfolio might include real estate holdings, investments in other companies, and cash reserves.
Additional information (optional): Portfolio management involves selecting and managing investments to achieve specific financial goals, such as retirement planning or wealth preservation. Investors can choose to manage their portfolios themselves or hire a professional portfolio manager.