Portfolio - Financial definition
Concise definition of the term portfolio
In finance, the term portfolio refers to a collection of financial assets such as stocks, bonds, and cash equivalents held by an individual or an institution to meet specific investment objectives.
Comprehensive definition of the term portfolio
A portfolio in finance represents a diversified mix of financial assets assembled to achieve investment goals while managing risk. It may include a combination of stocks, bonds, mutual funds, ETFs, and other securities tailored to an investor's risk tolerance, time horizon, and return objectives. Portfolios can vary widely in composition and strategy, ranging from conservative income-focused portfolios to aggressive growth-oriented ones.
Effective portfolio management involves asset allocation, rebalancing, and ongoing monitoring to ensure alignment with changing market conditions and investor preferences. For example, a retirement portfolio might consist of a blend of equities and fixed-income securities designed to provide both growth and income over the long term, while a trading portfolio might focus on short-term speculation and capital appreciation through active trading strategies.