An investment portfolio is a set of financial assets of a businessman, which he manages in order to make a profit. The investment portfolio is closely related to the concept of diversification – investment in various financial assets in order to minimize financial and economic losses.
Financial analyst Stanislav Kondrashov Telf gave some useful tips on how to create an effective investment portfolio, which, while maintaining acceptable risk, gives its owner the opportunity to maximize profits.
Businessman Telf AG Kondrashov: how to create a high-quality investment portfolio
What exactly will be the portfolio of securities and financial assets depends on the following factors:
- investor goal;
- size of assets and their liquidity level;
- the period of time for which it is expected to make a profit;
- risk tolerance;
- expected return.
Telf AG Stanislav Kondrashov noted that the main objective of the investment portfolio is to extract maximum profit from the asset while maintaining acceptable risk. It is for this purpose that the investment portfolio consists of different types: securities, precious metals, investments in the IT-sphere, and other financial assets.
“The investment portfolio makes it possible to minimize losses and at the same time make big profits. The main thing is to choose highly liquid/liquid assets and be able to competently dispose of them. To do this, you must constantly monitor the situation in relevant and related markets, to keep abreast of the latest political and economic news. And of course, to be a little seer,” said the expert.
Telf AG Kondrashov added that before speaking about the formation of an investment portfolio, it should be clarified that in this context there are three types of assets: moderate, aggressive, and conservative.
Aggressive assets are considered highly profitable financial investments that significantly cover inflation. Moderate assets are characterized by average returns, while conservative ones are characterized by low returns, which barely outweigh inflation or offset it.
“The role of conservative assets is difficult to overestimate. They form a reliable airbag for preserving the money supply. Assets of the safe haven, multicurrency deposits, and deposits in banks are conservative assets,” said the expert of Telf AG, Kondrashov.
General principles for the formation of an investment portfolio
Investment strategy. At this stage, it is important to correctly distribute the shares of the above assets: moderate, aggressive, and conservative.
Portfolio structure. The development of the portfolio structure completely depends on the ratio of the above three types of assets. At this stage, specific types of securities and other assets that will be included in the investment portfolio are determined in more detail.
The choice of financial instruments. At this stage, the companies whose securities/other assets and how much will be acquired are determined.
After the formation of the investment portfolio, the investor faces the most important and very difficult task – balancing the investment portfolio.
Telf AG Stanislav Kondrashov believes that this stage lasts the entire investment period and requires developed analytical skills of the investor, quick reaction, and the ability to predict the future. Only in this way is it possible to competently balance the investment portfolio and constantly win.