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Portfolio definition

Despite being the central focus of much of the Investment industry, it is surprising how few people care (or know how) to keep track of portfolio performance.
  1. Define - Define Portfolio.
  2. Context - Use Portfolio in a sentence.
  3. Quiz - Test your knowledge.
by Paul Alan Davis, CFA, July 16, 2016
Updated: January 1, 2019
Calculating risk-adjusted return measures and drawing comparisons between a portfolio and a relevant benchmark is a highly sought after skill. Learn more here.

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Portfolio definition

Beginner

Portfolio is a basket of individual securities managed as a pooled investment with a single objective. Portfolios are often compared to benchmarks and competing portfolios. Examples of portfolios include: mutual funds, hedge funds, ETFs, closed-end funds, pension funds and separately managed accounts (SMA).

It helps to think of a Portfolio at a snap in time. Holdings change minute-by-minute during trading hours as security prices change so typically for reporting purposes investors focus on a monthly or quarterly statement of holdings, like a balance sheet. Additionally, a Portfolio is 'rebalanced' periodically to reflect new views on holdings and also to accomodate cash flows in and out of the Portfolio.

There are many ways to account for what is ideally a diversified investment portfolio yourself so you don't have to perform the calculations by hand. Choices include online stock trading software, online portfolio tools, portfolio tracker software, online stock brokers, online stock trading simulators and some stock exchanges themselves.

Synonym: investment fund, asset portfolio, portfolio of securities


In a Sentence

Tom:  Could one stock be considered a Portfolio ?
Doc:  Certainly, but not a diversified one.

Video

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Video Script

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Quiz

Click box for answer.

Owning one mutual fund can be a diversified Portfolio all by itself. | True or False?

True

Investors rebalance their Portfolio when they trade. | True or False?

True

Questions or Comments?

Still unclear on the term Portfolio? Try out the course Quant 101.

Related Terms

Our trained humans found other terms in the category investing concepts


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  • To see all terms in the Glossary, click Outline.
  • For an introduction to the Population Parameter, click Back.
  • For a term from portfolio theory called the Portfolio Possibilities Curve, click Next.

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