What is a Portfolio in Investment
Tips for Managing a Portfolio
- Ensure You Have an Investment Goal
- Determine Your Risk Profile
- Assess the Capital You Have
- Choose the Right Investment Instruments
- Evaluate Regularly
Types of Portofolio
- Income Portfolio
- Value Portfolio
- Growth Portfolio
- Hybrid Portfolio
- Aggressive Portfolio
- Defensive Portfolio
DBS Treasures, Your Trusted Partner to Achieve Investment Goals
A portfolio is a term often used in the world of investment. Its important function makes it essential for every investor to truly understand it. That is why before you start investing in Mutual Funds, it is better to first learn about this concept of a portfolio.
This article will discuss the concept of a portfolio, tips on how to manage it, as well as the types every investor needs to know. Read on for the complete discussion below.
What Is a Portfolio in Investment?
In short, a portfolio is a collection of assets owned by an investor—whether in the form of stocks, Mutual Funds, bonds, or deposits.
The purpose of having a portfolio is to achieve maximum returns from future value growth. For this reason, each investor needs to build an investment portfolio in order to understand the variety of valuable assets they own.
By having a portfolio, you as an investor can anticipate which assets carry the risk of value decline during times of economic instability.
Tips for Managing a Portfolio
After gaining a basic understanding of the portfolio concept in investing, the next step is to learn how to manage it.
Managing a portfolio should take into account not only your investment goals but also your capital and risk profile as an investor.
Here are several tips you can follow to manage your portfolio:
● Ensure You Have an Investment Goal
To manage a portfolio effectively and keep your investments on track, you first need to determine your investment goals.
With a clear goal, it becomes easier to consider which instruments to choose and what tenure is appropriate.
Investment goals can vary widely, and should be adjusted to your needs—such as an emergency fund, education fund, wedding fund, property purchase, and so on.
Once you have your goals in place, you can then choose instruments that are suitable and can help you reach those financial targets.
● Determine Your Risk Profile
In addition to having investment goals, you also need to determine your risk profile as an investor. When doing this, be sure you know your comfort level in facing potential losses.
Factors to consider in setting your risk profile include income stability and, of course, your investment objectives.
After careful consideration, you can identify your risk level—whether it is conservative, moderate, or aggressive.
● Assess the Capital You Have
When managing an investment portfolio, you also need to determine how much capital you have. Make sure the funds you use for investing are “cold money,” not funds meant for daily needs or emergencies.
It is also important to note that investment returns and potential risks generally scale with the amount of capital you put in.
● Choose the Right Investment Instruments
Once you know how much capital you have, the next step is to choose the right investment instruments. Today, you can choose from a wide range of products such as Mutual Funds, bonds, stocks, and more.
In selecting instruments, consider both your goals and your risk profile. Don’t be tempted by products offering very high returns, because they usually come with equally high risks.
● Evaluate Regularly
Finally, you need to evaluate your portfolio regularly. Remember that a portfolio is not static. It must be adjusted to current conditions.
If it turns out that your current portfolio arrangement is not yielding profits, then you can restructure your portfolio plan accordingly.
Also read:
Types of Portfolios
With the above tips, you can begin applying them when managing your investment portfolio.
But first, it is important to recognize the following types of portfolios. Several categories that you need to know include:
● Income Portfolio
The first type of portfolio is the income portfolio. Typically, this is suited to investors who rely on dividends as part of their income.
● Value Portfolio
Meanwhile, a value portfolio is for investors who prioritize asset value movements in their portfolio management.
To achieve optimal profit, investors in this category often sell assets when prices are high and buy when prices are low.
● Growth Portfolio
The next type is the growth portfolio. As the name suggests, this portfolio focuses on increasing profits. The goal is to enhance the investor’s overall asset base.
● Hybrid Portfolio
Then there is the hybrid portfolio, which usually contains more than one type of asset. Its aim is to reduce market volatility while striving to maintain growth.
Based on risk profile, portfolios can also be categorized as follows:
● Aggressive Portfolio
This portfolio contains high-risk assets with the aim of maximizing profit. It is generally suited to short- to medium-term investments.
● Defensive Portfolio
On the other hand, a defensive portfolio contains low-risk assets. This type prioritizes stability and aims to protect capital.
DBS Treasures, Your Trusted Partner to Achieve Investment Goals
The discussion above has provided you with insights about portfolios in investment—from management tips to the different types. Beyond understanding these concepts, your investment journey can run more smoothly if supported by the right partner.
When it comes to a trusted investment partner, DBS Treasures priority banking is a financial institution you can rely on to help achieve your investment targets. If you are interested in starting Mutual Fund investments with DBS Treasures, you will enjoy a range of attractive benefits.
One of the key advantages is reducing investment risk through diversification, combined with support from financial experts who provide market analysis and up-to-date opportunities.
In addition, you don’t need to worry because investments are managed by professional Investment Managers to optimize product performance.
You can also use the DBS digibank Application to easily conduct buy, sell, and switching transactions, as well as register for a Single Investor Identification (SID).
You will further benefit from curated market analysis provided by financial experts, who communicate the latest opportunities tailored to your risk profile and portfolio needs, powered by Artificial Intelligence/Machine Learning (AI-ML). These insights are complemented with curated solutions in both investment (Grow) and insurance (Protect), enabling you to invest quickly and confidently through your preferred channels.
By choosing a trusted investment partner like DBS Treasures, your chances of achieving your investment goals are even greater.
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