The investment portfolio - is a set of the securities and other assets gathered for achievement of definite purposes. Any assets, from gold and the real estate, to stocks and options can be components of your investment portfolio.
There are many various types of the investment portfolios; they can be distinguished by various criteria, but the main types of the investment portfolios the following:
Aggressive portfolio: riskier, but also more profitable; the big share is made by actions; suits those who are ready to risk and are psychologically prepared for big fluctuations
Conservative portfolio: less risky and, as a result, less profitable; at such on the first place safety and safety of invested funds; generally consist of bonds, short-term loans, and other not risk tools
The diversified portfolio is such set of assets where any paper (or type of papers) isn't dominating. Advantage of diversification is that, due to a variety of assets in a portfolio, the general risk level decreases. Even if the cost of one asset will fall, the cost of another will grow, and the overall effectiveness of a portfolio won't suffer.
The main reason of need of creation of the investment portfolio — diversification. It is unprecedented that the investor has spent all capital for purchase of shares of one company. Such practice — a nonsense since the risk of crash is very high. Instead it is necessary to put in various tools to minimize risk and to keep profitability.
The principle of the investment portfolio is simple: not to stake all money, to protect itself from losses and "not to put all eggs in one basket".
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