Portfolio

The term "portfolio" refers to the entirety of an individual's investments, most normally in stocks and securities, managed through a financial professional called a stockbroker. A key aspect of assembling and maintaining a portfolio is asset diversification for the purpose of reducing investment volatility. Advising a client on proper diversification is one of the key duties of a stockbroker or financial advisor.

The security mix in a diversified portfolio might contain such items as stocks, mutual funds, money market funds, bonds, real estate, warrants, futures contracts, options, or gold certificates among other asset classes. A well diversified portfolio is tailored to the investor's current financial standing, long term investment goals, and tolerance for and ability to absorb risk.

While the Internet has made it possible for investors to acquire real time stock data and to make trades for nominal fees - the basis of assembling a portfolio - most investors prefer to take the traditional route of investing through a brokerage house.

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