BRIEFCASE
BRIEFCASE
1. A quadrangular bag with a clasp, usually made of leather, for carrying business papers. A heavily stuffed briefcase.
2. The same as the ministerial portfolio (polit.). Portfolio distribution. Minister without portfolio.
3. trans., only units. Manuscripts accepted for publication by a publishing house or editorial board of a magazine or newspaper. There are several stories in the editorial portfolio.
Explanatory Dictionary of Ushakov. D.N. Ushakov. 1935-1940.
Synonyms:
See what "PORTFOLIO" is in other dictionaries:
Portfolio - get an active VipAvenue coupon at Academician or buy a profitable portfolio at a low price at a sale in VipAvenue
briefcase- briefcase … Nanai-Russian Dictionary
briefcase- PORTFOLIO, PORTFOLIO i, m. porte feuille m. 1. Pocket book, wallet. Jan. 1806. Large wallet. Dal. In the mail I received today, I received an inventory of the remaining belongings, among others, it is not a cross with relics, a portfolio book ... ... Historical Dictionary of Gallicisms of the Russian Language
briefcase- Leather goods for carrying business papers, school stationery, books, personal items. [GOST 28455 90] portfolio A combination of assets that make up the wealth (better - property) of an economic entity. Most often… … Technical Translator's Handbook
- (fr., from porter to wear, and feuille sheet). Large wallet, kind of bag for business papers. Ministerial portfolio. The title, the office of the minister, to receive a portfolio is the same as to receive a ministry. Dictionary of foreign words included in the Russian ... ... Dictionary of foreign words of the Russian language
Briefcase- a combination of assets that make up wealth (better - property) of an economic entity. Most often, this term refers to a set of securities owned by a legal entity or individual). Economic ... ... Economic and Mathematical Dictionary
Cm … Synonym dictionary
How is the formation and provision of liquidity of the portfolio? What is the principle of investment portfolio conservatism? What are the features of portfolio optimization by diversification?
There is no investment without risk. This rule should be learned by every novice investor. There are no assets with a 100% guarantee of profit, otherwise every investor would become Henry Ford and Warren Buffett. Even a bank deposit is not such a reliable tool as it is positioned by financial institutions.
The level of profitability is influenced by thousands of reasons - economic crises, inflation, financial illiteracy, exchange rate fluctuations, stock market disasters. However, the investor has an effective way, if not to completely eliminate the risks, then to minimize them. This method is called "investment portfolio".
When creating a portfolio, you do not invest in one instrument, but use several investment areas. About how this is done and what types of investment portfolios there are, I, Denis Kuderin, an investment specialist, will tell in a new article.
And you will also find an overview of reliable professional companies that will help you form a portfolio and manage it competently.
Go ahead, friends!
1. What is an investment portfolio
Why experienced investors get more than beginners? Do you think it's because the latter have less money? The answer is obvious, but not entirely correct. Of course, the amount of investment directly affects the profitability, but completely different factors play a decisive role.
Experienced financiers know how to use investment instruments correctly and know how to manage them as efficiently as possible. They are aware that the more investment areas are involved, the lower the risk of ruin and the higher the likelihood of obtaining a stable and long-term income.
A beginner is looking for the most profitable and promising asset, like the knights were looking for the Holy Grail. And when he finds it, he hurries to invest in it all the cash. This method can work, or it can ruin the investor. If you are a player by nature and want to play, not earn, then this path is for you.
Smart investors do things differently. They are not looking the most high yield instruments. They combine conservative investments with moderate-risk and high-risk investments. If one option does not work, ten other tools cover the possible losses.
The total assets of the investor is his investment portfolio. This portfolio contains securities or other types of investments that allow the owner to profit from interest, dividends or speculative transactions.
2. What are the types of investment portfolios - TOP-7 main types
The classification of investment portfolios is rather conditional. Professional investors try to combine different investment strategies. It happens that one half of their portfolio is profitable, the other is made up of growth investments.
However, every investor needs to know what types of portfolios are.
View 1. Income Portfolio
From the name it is clear that such a portfolio is designed for high investment returns with minimal risk and is preferable for conservative investors.
It includes bonds (government and corporate) with small regular payments, shares of large companies in the commodity or energy industries. The income from such a portfolio is formed mainly due to interest and dividends. If we talk about indicators, then this is 10-25% per annum.
View 2. Growth Portfolio
The profit of the growth portfolio is provided by the increase in the value of securities. This tool is used by investors who want to make a significant profit. Directions of investments - stocks of rapidly developing companies, start-ups.
The risks of the growth portfolio are quite high, but if the investor sells his assets on time, the profits will also be significant. Profitability indicators are not limited.
View 3. Balanced portfolio
Portfolio of a moderate investor. It is formed from securities of well-known companies and has a stable composition. The owner of such a portfolio focuses on long-term and capital preservation. However, stocks with a rapidly changing value may also constitute a small part of the assets, but such a risk is always justified and is under the strictest control.
View 4. Risk capital portfolio
Portfolio of a stock player aimed at maximizing capital gains. Such an investor knows that the highest returns come from the highest risk investments. The assets include shares of new and high-growth enterprises, as well as companies developing new technologies.
View 5.
A conservative portfolio designed for the long term. The owner operates on the principle of "buy and forget". To engage in such investment, you need to have a solid budget, because the money invested will not be available for several years.
Typical example
Five-year federal loan bonds issued in 2012 by the Central Bank were redeemed in the spring of 2017. All owners of such securities will get their money back in full. They have already received income from coupons that were paid every six months during the entire period of the bonds.
Let's go back to Warren Buffett - a clear supporter of long-term investments. He said: " If you don't plan on holding the stock for 10 years, then don't buy it even for 10 minutes. Stable profitability is a matter of long terms».
View 6. Portfolio of short-term securities
The opposite of a long-term portfolio. Such a package includes investments of maximum liquidity and a quick return on funds. An example is investments in exchange and currency speculation in the Forex market,.
View 7. Portfolios with regional or foreign securities
Portfolios for patriots of their region or entrepreneurs who thoroughly know the domestic market of their own region. Varieties of a specialized portfolio - sets of securities of an industry nature (for example, oil refining companies), shares of foreign companies.
The table of investment portfolios will clearly demonstrate the characteristic features of all varieties:
№ Portfolio type Tools Yield 1 Income Portfolio Securities with high interest and dividends Moderate 2 Growth Portfolio Securities with a high increase in value high 3 Balanced Income and growth papers are divided approximately equally Moderate 4 Risk capital Shares of fast-growing companies, startups high 5 long term Bonds, shares of large companies Low but stable 6 Short Securities of undervalued and young companies high 3. The procedure for the formation of an investment portfolio - 5 main stages
So, you have firmly decided to form your investment portfolio. Consider what is needed for this.
I recommend to all beginners to follow the principle of conservatism. This means that the portfolio should be based on conservative and reliable financial instruments. You will take risks later when you increase your assets by 50-100%. In the meantime, be prudent, patient and consistent.
And follow the expert guidance carefully.
Stage 1. Setting investment goals
The more specific the investor's goals, the more effective his financial activity will be. If a person enters the market with vague intentions, the result will also be vague and uncertain. The goal of “make some money if you can” won’t work. Set realistic and specific goals for yourself.
The pro works for the result. He comes to the stock exchange prepared and ready to win. At the same time, safety is never forgotten. His capital is invulnerable to external shocks, and he himself is protected from impulsive decisions by a correctly chosen strategy.
Decide in advance how much and why you want to earn on investments. The right goals are to increase capital by 50% in a year, save up for a car, get more on the stock exchange than in your main job.
I would advise beginner investors to work with a professional consultant. Many brokerage companies perform such functions even for free. Do not neglect qualified help, listen to wise advice and follow them.
Stage 2. Choosing an investment strategy
The choice of strategy depends on the personal preferences of the investor and his ultimate goals.
In fact, there are only 3 investment strategies:
- aggressive;
- conservative;
- moderate.
An aggressive (aka active) strategy involves constant monitoring of market changes. An active investor is constantly acting - buying, selling, reinvesting. Its goal is to increase capital in the shortest possible time. Such a strategy takes time, knowledge and money.
The passive strategy is waiting. The investor does not participate in intermediate processes and expects only a long-term result. Or it makes a profit from dividends, interest and coupons. This is the strategy I would recommend for beginners. A little boring, but reliable.
Stage 3. Analysis of the securities market
Based on your investment goals, analyze the securities market and determine the most suitable instruments for your strategy. At this stage, I recommend choosing a reliable broker - a guide in an endless financial labyrinth.
Investing on the stock exchange is certainly more difficult than making bank deposits, but much easier than earning money by daily work in a factory or office. The main thing is to take responsibility for financial decisions and understand the exchange mechanisms at least at the amateur level.
But do not rush into the pool with your head. To get started, read blogs, articles, books for beginners. When you understand how bonds differ from stocks and what ETFs are, gradually move on to practice. Study the quotes of companies for the current and last year, see how much certain securities have grown, and what income it has brought to their owners.
Another option is to open a training brokerage demo account, which every professional company has, and trade virtual stocks for a while. This will help you get comfortable in the market and understand the basic principles of trading.
Some beginners choose the strategy of following experienced investors. Sometimes brokers allow you to study the portfolios of successful players and invest money on the principle of "do as I do."
Stage 4. Selection of assets in the portfolio
Stock investments are unpredictable, but this is not a lottery or a casino game. Here you have the right to control the situation and balance the risks. It is impossible to predict the exact profit, especially for the shares of the domestic Russian market, but the approximate increase in income for a conservative strategy is a quite definite figure.
Distribute assets in those areas in which you are at least minimally versed. You should not, for example, invest in futures if you do not know how they work. It is better to put the balance of unallocated funds in the currency. Let there be free money on the brokerage account.
Stage 5. Purchase of securities and the beginning of monitoring of the formed portfolio
Securities on the stock exchange are purchased through a broker. It is rare to invest directly in stocks. This is done mainly by experienced investors with big money.
Buying assets and forgetting about them is the wrong tactic. Even if you are the most conservative investor in the world, you need to regularly review your portfolio and conduct an audit at least once every quarter or six months. You will have to get rid of some papers, and some, on the contrary, will have to be bought in addition.
4. Professional assistance in portfolio investment - an overview of the TOP-3 brokerage companies
I have already said that without a broker in the securities market, a beginner has nothing to do. A broker is not only an intermediary who receives a percentage for his services, they are your eyes and ears. The more reliable the conductor, the higher the profit.
On some exchanges, brokers combine the duties of a financial advisor. Sometimes even at no extra cost.
Study the review of the most reliable brokerage companies in Russia and use their services.
1) FINAM
The oldest broker in Russia (the company was founded in 1994). In addition to brokerage services, he is engaged in capital management, training, foreign exchange transactions, direct investment in production and the economy. Keeps the course for continuous development and implementation of the latest information technologies and customer services.
FINAM specialists will help the client to form an investment portfolio, they themselves will choose the most profitable and promising areas in accordance with the goals and financial capabilities of the investor.
Open a demo account or a real brokerage account directly on the company's website. The procedure takes several minutes. Almost immediately you get access to exchange transactions with securities and currencies. The company promises an income of 18% per year even with a passive investment strategy.
2) Gold Man Capital
The firm provides consulting services in the field of private and corporate investments. These guys will not only tell you what an effective investment portfolio is, but also help you create one.
Each client is assigned an individual portfolio manager who manages assets in order to extract the maximum profit from them. The income of the intermediary depends on your income, so the consultants are vitally interested in the well-being of the client.
3) FMC
Another intermediary company with a long track record and an impeccable reputation. Clients get access to investments in shares of the largest world and Russian corporations. Do you want to become a co-owner of Microsoft, Gazprom, Coca-Cola or Apple? Nothing could be easier - register with FMC and get a personal advisor who will manage your investment portfolio throughout the entire investment period.
5. What are the ways to optimize the investment portfolio - 3 main ways
A lazy person will always find a reason why he will not invest. He is more likely to believe Sergei Mavrodi than himself, or he will buy household appliances when the dollar starts to rise in price.
An active and far-sighted individual who thinks about the future does not engage in such nonsense. He is looking for ways to optimize his personal investment portfolio. With him, he is not afraid of internal crises, currency fluctuations and the fall of the ruble.
There are many ways to optimize a portfolio, but I will consider the most effective ones.
Method 1. Portfolio diversification
The first and foremost rule of the investor. In plain language, it sounds like this: "Many eggs, many baskets." The more instruments you choose, the lower the risks. But incomes must be calculated in such a way as to cover inflation.
Investments - investing money in something to generate income and, as a result, financial freedom and independence.
An investment portfolio is a group of valuable assets (gold, stocks, bonds, options) gathered together for a specific purpose. More experienced, conservative investors invest in long-term projects - with little risk and less profit. More risky "adventurous" investors prefer short-term and more profitable business, but in case of failure, they may be left with nothing. However, all of them are united by one task - to earn income.
Main types of investment portfolios
Portfolios are divided into many types, but the main ones can be distinguished:Conservative - contains the least number of risks, implies less profit. Security of invested funds is the main task of such a portfolio. In most cases, it consists of short-term loans, bonds, deposits in gold, real estate.
Aggressive - suitable for people who are not afraid to take risks. They must have a stable psyche, ready for market fluctuations. But the profit in case of luck will be great. Most of the assets are stocks.
Balanced is an ideal type of portfolio in which both indicators - stability and risk - occupy equal shares. In case of failure of some investments, others will become a help.
Ideal investment portfolio
Why do you need an investment portfolio?
First of all, you need to decide - why is such a portfolio being created? Someone wants to secure their old age, and someone invests to earn more money for current expenses. An investment portfolio is a convenient tool for achieving any goals. After all, by investing in various instruments, you can reduce risks and maintain profitability. In other words, if it doesn’t “burn out” somewhere, there are still other options. Therefore, experienced investors never invest all their funds in one enterprise, but evenly distribute them among different investment objects, drawing up a competent business plan.How to create an investment portfolio?
Points to consider when creating an investment portfolio:Investment risks
investment goals
investment terms
Formation of an investment portfolio
If a person wants to calmly receive a stable income without risks, he should choose a conservative portfolio. At the same time, he will receive an income of about 4-5% per month, but this is compensated by reliability. An aggressive portfolio allows you to receive 30-70% per month, but this is also associated with increased risks. Therefore, the best way out is a balanced portfolio - something in between the two. Such a portfolio will allow you to receive up to 20% of income per month with a lower level of risk. The available investment options are quite extensive.
What is portfolio rebalancing?
Rebalancing is the process by which capital within an investment portfolio is redistributed from less profitable assets at the moment to more active incomes. Thus, the overall profitability of the portfolio increases and, accordingly, the profit of the owner. 
Return and risk in an investment portfolio
The main value in the organization of investment portfolios is their risk and return, as well as diversification (distribution) of risks. The most important question in this case is how much money is the investor willing to lose? These will be the risks. The risk of an asset is a variable value, which depends on many factors. The portfolio return is calculated as the total return on individual types of stocks and securities, including risk-free assets. In order to reduce the risks in the portfolio, it is necessary to include securities with different directions in terms of their profitability. The higher the risk of the project, the higher the income requirements. 
How to manage an investment portfolio?
Portfolio management is a series of manipulations with securities aimed at reserving and increasing investments.Investment portfolio management
There are several management strategies:
An aggressive strategy implies constant monitoring of the exchange market, continuous assessment of possible income and asset renewal. A passive or conservative strategy is to keep investment instruments unchanged for a long time. The portfolio is formed using long-term securities with reduced risks.
A balanced strategy is an even distribution of all assets, which, in the event of market fluctuations, guarantees minimal losses.
By following a well-chosen strategy, but at the same time responding to market changes, you can succeed in the field of investment. A profitable investment in a crisis will be of help to novice investors. The editors of the site wish you financial well-being and invite you to read an article on how to learn how to trade Forex.
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09Apr
What is an investment portfolio
Like all our articles on investment topics, let's start with one well-known axiom of successful businessmen:
Money should make money
It is in order to increase your income, even being in the same position and receiving only indexation to your salary, that you can collect a fortune by investing.
With the theoretical base in the context of "Why is this needed at all" sorted out.
Now let's move on to investment portfolios. This concept can have two meanings: broad and narrow. Let's start with the narrower one.
Investment portfolio - a set of securities in which an investor invests in order to make a profit. These can be stocks, bonds, options, futures, trading contracts, exchange-traded financial instruments, etc. They have one thing in common - these are securities, investing in which with a certain degree of probability will bring profit.
The narrow sense of this definition is more suitable for professional investors, large players. One of the main investors in Europe are banks and. Consider, using their example, the specifics of portfolio investments and their difference from direct ones.
Portfolio investments always perform one specific task: to bring profit to their owner. Moreover, they bring profit simply by being in the portfolio. To fully understand the meaning of this, consider a little theory about direct investment.
Direct investments – investing in company shares to obtain a significant / main share in the board of directors. That is, direct investment is the purchase of 51% of the shares of a company in order to completely subordinate it to itself.
Again, let's take the example of banks. They buy shares in insurance companies and force them to act in their own interests. They insure deposits, people, their health, loved ones and other transactions in order to maximize income. But at the same time, such investments pay off on the condition that the company whose shares were bought acts in the interests of a larger “brother”.
And thanks to this, you can catch the difference. Direct investments are aimed at "subjugation" of the company, by buying the lion's share of shares and subsequent participation in management, while portfolio investments are aimed at generating income.
An investment portfolio in the broad sense is a somewhat more mundane concept than its narrow sense. And it is pointless to consider it, because many people know about investing in a bank, in real estate, or simply about issuing a friend. In this article, we will focus on portfolio investment in securities.
Advantages and disadvantages of portfolio investment
Let's start with the most important question: the advantages and disadvantages of portfolio investment. Let's start with the positive.
Advantages
Liquidity. The first and most important advantage of portfolio investment in securities is the liquidity of investments. In most cases, investors invest their money in highly liquid or medium liquid securities, due to which, if necessary, they can easily get rid of them without a significant loss in value (and often with a profit).
It is precisely because you can sell all your securities in one or two hours without losing value that this principle comes first.
But this does not apply to all securities. Despite the fact that they circulate on the stock exchange every second, demand for some securities can only be in 2-3 days, or even more. But this category includes little-known companies that no one knows. There is very low confidence in them, their securities are bought with great caution, but at the same time, investments are often justified.
Openness. fairly open to the general public. This applies to both pricing mechanisms and trade volumes. There is no need to independently study the statistical data in order to determine at what cost one or another paper will need to be sold (unlike the real estate market, which is beloved in Russia). All this is in the public domain for any person - just go to the website of the Moscow Exchange.
It is openness that allows even the most ignorant person to see several factors: price dynamics from period to period, the volume of investments in a particular security, as well as the spread - the difference between the purchase and sale prices.
This data is always made public, so everyone can evaluate the effectiveness of investments. The same cannot be said for other types of investments such as real estate, business, investment funds or bank deposits. The pricing mechanisms there are more nebulous, with prices fluctuating based on strange factors.
Yield. Securities can be immediately attributed to highly profitable financial instruments. Moreover, shares, as one of the most profitable types of securities, can bring money in two cases at once: upon payment and upon an increase in the value of the paper itself.
And if you look at the distance, they bring huge profits to their investors in cases where an unknown company breaks into the market.
Simplicity in management. Securities are also good because you can buy highly reliable shares and simply forget about them for a while. Dividends will be credited to your bank account, without your direct participation.
However, this is a double-edged sword. On the one hand, you have a fairly good one, but on the other hand, with proper management, profitability will increase significantly.
In general, securities have good advantages that make them a fairly profitable investment in the hands of professionals, and moderately profitable in the hands of novice investors.
But in addition to the advantages, portfolio investment in securities has a number of disadvantages.
Flaws
Riskiness. The main rule of finance is that the higher the risks, the higher the income. And if securities are a highly profitable asset, then the risks there will be correspondingly high.
Knowledge requirements. Climbing into the securities market without basic knowledge is akin to suicide. And this is not because there are only sharks on the RZB who are ready to hit the jackpot with a beginner. This stereotype. Just without basic knowledge, even with enough luck, you will very quickly lower your entire investment account without increasing your capital.
Investing in RZB can be compared to poker. Even the luckiest player who does not know the theory, only the basic rules of the game, will have a moment when he will simply be crushed by experience. You cannot always be lucky, so without a theoretical base there is nothing to do there. Especially if you don't have crazy luck.
Analysis. This is the biggest problem. Many people's inability to analyze situations can simply ruin their investment account. In order to invest competently, you do not need to have a huge amount of knowledge and special skills. It is enough to correctly build cause-and-effect relationships.
But at the same time, most investors forget about it. Competent analysis will allow you to identify a negative trend a few days before it starts, minimize risks and get maximum profit even when the market is flying down.
Let's move on to the types of investment portfolios. This is very important information, the knowledge of which will help you form your own investment principles. First, let's start with the most common and popular classification.
conservative portfolio. In the middle of the 20th century, conservatism was the most important principle of investing. It was better to receive less money than to lose it completely.
A conservative investment portfolio is built on the principles of high liquidity and lowest risk. Therefore, for the most part, there will be bonds, financial instruments, and a few percent of stocks.
Suitable for beginners due to small requirements for knowledge and skills. Such investments allow you to gain experience and get the first income that can be directed to something more interesting and profitable.
Aggressive portfolio. It contains high-yielding securities. And as you already understood, the higher the profit, the greater the risk. Therefore, it will be dominated by shares, less often by financial instruments, and a very small part will be bonds.
Suitable for experienced players who are not afraid to take risks, who are able to correctly assess the prospects for the growth of the enterprise, profitability and, in general, can predict the behavior of the market. Not recommended for beginners. Average investment funds love this style.
Combined, mixed or moderate. An investment portfolio in which the conditions of reliability and profitability are equally observed. It cannot be said that this is a happy medium because some stocks will be overvalued by the market even if the companies are highly reliable, and some fairly profitable stocks will have minimal risk.
The formation of an investment portfolio is the case when it is better to choose extremes than to combine styles.
According to the degree of predominance of securities, it is possible to distinguish - diversified(a portfolio with approximately equal shares of different securities, without a strong predominance of one) and with a predominance of some securities.
The first is more balanced due to the fact that many different investments compensate each other in case of drawdowns. The predominance of one security forces the investor to “bet” on it, and take the rest only for insurance.
Also, according to the method of generating income, you can distinguish:
- growth portfolio. Oriented towards the purchase of shares, the value of which will grow;
- income portfolio. Focuses on the purchase of securities that will bring income (from redemption, dividends, etc.);
- Short term portfolio. Focuses on the purchase of highly liquid shares for their subsequent resale;
- Long term portfolio. Purchase of shares (regardless of liquidity) to obtain a stable income;
- regional portfolio. Purchase of securities of one specific region. Allows you to focus on a narrower market segment;
- Industry portfolio. Buying securities in one industry. The same as in the previous case - using your knowledge to narrow the investment field;
Knowledge of the classification allows you to more fully and competently imagine how to follow the path of a competent financier, what to invest in and in what cases. And now about the principles of investing.
Principles of portfolio investment
Now let's talk about what principles underlie the formation of an investment portfolio.
Target orientation. This is the most important principle of investing in general and portfolio formation in particular. The main thing to decide is why you are investing in securities at all.
There may be several options: saving money (indexing for inflation), maximizing profits, gaining initial investment experience, acquiring real-time securities market analysis skills, generating completely passive income, etc. You can continue indefinitely.
The main thing to remember is that you need to set a clear goal, following which will be the key to correct and successful investments.
After the formation of the task, it is already necessary to set smaller goals:
- Find highly liquid securities for resale;
- Build a conservative investment portfolio for passive income;
- Buy stocks that will grow in the future to maximize;
- During trading on the exchange, take advantage of leverage to build intraday trading skills.
There may be many goals, but they must be.
Balance of risks and incomes. The balance of risks and returns is the very controversial point in which investors cannot find a compromise. Some people say that just earning income is very important, others believe that it is high profit numbers that make the securities market so attractive.
Everyone must decide for himself, already on the basis of his goals, how exactly he should balance on the verge of risky operations and profit. But do not forget that in some cases high profit is not associated with high risk. This is rare, but it happens.
Liquidity. Do not forget about the liquidity of your securities. You have to buy and sell over and over again, which is why a high “tradability” will make your assets very attractive.
But there is one interesting opinion - low-liquid assets can be more profitable. This is true, because low liquidity - securities of the 3rd echelon, that is, little-known companies, a kind of dark horses. It is precisely because of the undervaluation of the securities of one or another issuer that such a huge, at first glance, profitability is formed.
Diversification. Distributing risks between several assets is something absolutely every investor cannot do without. And the point here is not that it is necessary to balance between high-yielding securities and reliable ones. It's just that portfolios with a large number of different assets give the investor more freedom of action to change the set of their securities.
If you have one type of stock prevailing over the majority, this means that you will not be able to remove them from your investment portfolio with a 90% probability, even if you see that they are unprofitable. And if there are several papers in equal shares, then parting with one of them will happen less painfully.
What is included in the investment portfolio
The investment portfolio may include the following assets:
- Stock;
- Bonds;
- Futures;
- Options;
- Bank deposits;
- Currency;
- Precious metals;
- real investments.
Shares and bonds- a kind of antagonist in the world of securities. While the former are risky, bring greater profitability and can make a person millionaire at a distance, the latter are more conservative, not adapted for short-term and medium-term trading and are designed for passive investors.
Investing in stocks implies constant surveillance of the activities of the company, while bonds, on the contrary, require almost no attention. It is not for nothing that shares are used to raise initial capital from most companies, and bonds are preferred by the state for borrowing from the public.
Financial instruments like futures and options are an interesting type of investment in RZB. Speaking very roughly, these are bets on economic events. Using these tools requires certain knowledge and skills, but despite this, the futures market is the most "kind" for beginners.
Bank deposits and deposits. Banks, whatever the current situation in the banking sector, are still the most reliable means of investing small and medium amounts.
For those who want to create a completely passive income for themselves, bank deposits will be an excellent means of covering inflation and creating a small “airbag” if another crisis begins and the securities of selected issuers will fly sharply into the pipe.
Currency and precious metals. At the same time, it is advisable to choose a currency based on the current economic situation in the world, soberly assessing the prospects of a particular country.
In the event of a crisis in Europe, you should always look at the dollar, in the event of a crisis in America - at the Euro or the Pound. Plus, cryptocurrencies are now gaining popularity, the leading of which is still bitcoin.
This is a great way to cover inflation, because the trend is that over the past few years, this currency has continued to increase, and in about 15-20 years, its production will completely stop, which can make bitcoins an analogue of gold.
Speaking of precious metals. - one of the most interesting types of investments. You can invest money and you will be given a certificate that you own some amount of precious metal.
Interest will be charged on it, in which case you will be able to withdraw money, and along with an increase in the value of the metal, your account will increase. But an impersonal metal deposit is a way of long-term investments, or a means of saving before a crisis.
Real investment- investments in real estate, business, a share of a startup and other assets that can be touched to some extent. In Russia, the culture of real investments is still not widespread, and for ordinary people, investing in residential real estate is still the most popular option.
This is what an investor's portfolio can consist of. There may not be any specific positions, for example, instruments, real investments, metals and currencies. The main backbone is still made up of securities, mainly bonds, while more conservative investors have the lion's share of deposits in banks.
Step-by-step instructions for building an investment portfolio
Now let's move on from theory to the practical part, namely step-by-step instructions on how to form your investment portfolio.
Step 1. Choosing investment goals
As we said earlier, the first thing to do is choose your target. The question “Why am I investing money” must be approached with all seriousness, based on the information above.
Goals can be divided into two areas:
- Why do I invest;
- How much do I invest?
After answering these two questions, you can move on to the next step.
Step 2. Determining the strategy
After choosing the goals, you will need to decide which strategy to use. An aggressive strategy allows you to earn money by taking risks, a conservative one allows you to survive inflation and have a truly passive income, and a mixed strategy balances on the edge (does nothing).
At the same time, one should not think that adherents of aggressive strategies mindlessly buy stocks that can go uphill. They take the same into account risks, expected profit and are engaged in forecasting the behavior of the price of a particular asset.
In fact, what distinguishes them from conservatives is the object of investment: aggressive investors will prefer to invest in an unknown company that can shoot, while conservatives will prefer fame and reliability.
Step 3. Search for a broker
Then you should find yourself a good broker. It is not worth talking about stock brokers for a long time. Just analyze the activities of several companies, find out if there are banks in your area that provide brokerage services, if not, contact specialized companies.
Step 4. Selection of investment objects
Now the hardest part. It's time to decide on the object of investment. In the first 4-6 months it is better to be conservative. Study the market, ask the price, gain experience. It is advisable to invest in the most reliable stocks (blue chips), about 1-5% in the state. bonds (although, frankly, the yield on them in 2017 will be lower than on bank deposits),
Some statistics: 5 investors out of 100 lose their investment account to zero, and then within a few years. If you do not engage in mindless game / trading on the stock exchange, then it will be very difficult to lose your money. And even more than half of the investors make a profit.
Therefore, do not be afraid to invest in securities. Just for starters, in the first year of investment activity, we strongly recommend that you keep about 50% of your funds in the bank, directing profits to increase investment volumes.
Step 5. Analysis of the created portfolio
Then comes the most interesting time. You will need to monitor the performance of your portfolio from time to time. If you are a conservative, you will just need to periodically monitor the course and at least once a week watch the news of those companies in which you have invested.
But if you choose an aggressive style, then you will have to watch the market much more often. It is necessary not only to read the news on the company's website, but also to look at the quotes every day, constantly look for the "underdog" company - a greatly underestimated newcomer to the market, look at those who are overestimated. This is a complex analytical job that will bring a lot of income if done right.
Step 6. Portfolio Optimization
Optimization follows from the analysis. If the issuing company in which you have invested shows poor results, falls, the financial result is consistently negative, then you should part with these securities. Or hold them, leaving the belief that they will rise again, pushing off the crisis bottom.
The approach to portfolio optimization is individual for everyone. Conservatives rarely change their choice, aggressive players part with papers once a week or a month, and average players try to sell when the price is up and buy when it draws heavily.
Step 7. Making a profit and using it
The last and most delicious step. Making a profit is what all people invest their own money for. If this is not your passive source of income, then you should use profits to expand investment volumes.
In what proportion to let the profit back into business is up to you. Experienced players recommend doing this at a rate of 70/30.
Little secret: many people who are involved in portfolio investing hit the real jackpot in moments of crisis. The moment when the market is oversaturated, the financial bubble bursts, most companies are a real paradise for those who can assess the real prospects of companies without panic. Just look at the movie "The Big Short", which tells how several financiers saw the economic bubble in the real estate market in America and took advantage of the situation.
But we have not mentioned one very important step here. Even before you start setting yourself investment goals, you need to study the necessary theory. No need to carefully study the principles of pricing.
A small digression about paid online training for playing the stock exchange, investing and other similar things. Often this is complete nonsense and they try to sell you the knowledge that you can get for free. You can learn how to invest: on forums, reading specialized literature (there is free, but it is advisable to purchase a paper version) and reading blogs of successful investors. But, of course, occasionally there are very good courses.
This is where Brian Tracy's well-articulated method comes in handy: Find out what successful people in your field do and copy after them. Collect the thoughts and skills of successful investors, and you can make a profit like them.
Financial intermediaries
We cannot but touch upon the topic of financial intermediaries. To do this, we turn to the west. There the culture of financial investments is much better developed than in Russia. Each Western and American family owns shares of 2-3 companies and is ready to invest a small amount in a new and promising business.
But in addition to self-investment, there are many investment funds in which people transfer their money to receive income. Funds carry out their activities at the expense of clients' funds, guaranteeing them a fixed income. If they show a large profit, they take their commission.
But in Russia the situation is somewhat different. We do not have a culture of independent investment as such. At the same time, financial intermediaries in the field of investment are still in their infancy.
Another negative point is the fake profitability figures. Investment funds on their websites show a yield for the year - 60%. It is clear that this result is nothing more than drawn numbers, because it is simply impossible to show such indicators for more than one period, because investment funds are primarily interested in stable income generation, and not big numbers.
But two financial intermediaries are worth paying attention to.
Mutual funds
Or as they are abbreviated as mutual funds. The principle of their work is as follows: you buy an investment share for a predetermined price, and according to the purchased “share”, at the end of the period (most often a year) you receive your funds back + the interest received.
At first glance, everything is very attractive. You just invest money, and professionals in their field work and keep a commission for themselves if they make a big profit. In reality, things are not so rosy in Russia. Drawn figures, big risks, periodic closure of banks. and, accordingly, their investment funds. All this together does not give a very positive result.
Nevertheless, at the end of 2016, the Central Bank took seriously the investment direction and the introduction of an investment culture into the Russian economy. That is why we should expect more serious operations to control the activities of mutual funds.
This means that approximately in 2018, investment funds will have to fully whitewash their activities, show real profitability figures and make a profit 1.5-2 times higher than a bank deposit.
Broker banks
Here is another principle of financial intermediation. Broker banks provide an opportunity and tools for trading in the securities market. Moreover, they carry out all operations on your instructions. But there is one trick - you can always talk with bank employees about investment objects, volumes and strategies for investing your funds.
Employees of any brokerage company are well aware of what is happening in the market, and therefore they are happy to advise their client. By talking to them, you can get practical advice on what is right for investment right now, what to get rid of, and what is overpriced.
The broker is interested in your profit, because he receives a commission from your transactions. That is why its employees will help you in every possible way.
Analysis of the effectiveness of the investment portfolio
The effectiveness of an investment portfolio is a somewhat vague concept. For some, it is the preservation of funds, for others - a constant increase in income. Still others generally prefer to create passive income for 5-10 years. But despite this, the analysis of the effectiveness of the investment portfolio has a common point.
Investors are primarily interested in money. That is income. That is why the main principle of the investment portfolio is profitability. It shouldn't make a loss. Every time you should receive a net profit from your investments. This means that you need to cover inflation and the commission of a brokerage company that allows you to carry out your activities on the exchange.
The easiest and most effective way to analyze the performance of an investment portfolio is to look at the distance to see if the return on investment is increasing. If it increases, it means that you work better than 80% of investors. If the profit plus or minus is stable, then you receive your income without developing as an investor. This is good for those who create passive income with a minimum investment of time and effort.
But if the profit decreases and the investment account shows losses, then steps should be taken to optimize the investment portfolio.
Portfolio Optimization
Creating an optimal investment portfolio for the first time is unlikely to succeed. The market is volatile, and what yesterday seemed profitable and stable, now only brings losses. That is why you need to optimize your investment portfolio at least once a month.
You analyze the behavior of your securities for several weeks, and if they show consistently poor financial results, you will need to do a few things:
- Find the reason;
- Make a prediction;
- Act according to this forecast.
Everything is very simple here.
If stocks show a negative result, then the reasons may be as follows:
- Negative economic situation in the country;
- The fall of the industry;
- Internal problems of the company;
- Change of leadership positions;
- Undervaluation of shares;
- Getting rid of overestimation.
Consider the reasons for which you need to change securities:
- The fall of the industry;
- Getting rid of revaluation;
- Internal problems of the company;
- negative situation in the country.
They are positioned this way because the downfall of the industry is the main reason to get rid of the company's securities. If the industry becomes unprofitable, it means that it will only get worse.
Example: oil companies in 2014-2016. During this period, these companies suffered huge losses due to the fall in oil, and in general, their papers should have gone down the drain, if not for government support, which covered all their losses. But there were significant drawdowns, especially against the backdrop of an increasing dollar.
When the market "opens its eyes" and realizes that it has overestimated a particular company, then a massive sale of securities begins. After it, there will be no sharp take-off, or even at least a gradual “climb”. That is why, as soon as you see that the market has "seen the light", feel free to sell securities.
The company's internal problems are a reason to get rid of securities in an aggressive game. To understand why, it is enough to turn to the well-known Apple. As soon as the media learned that Steve Jobs was ill, the shares of the Apple Company began to rapidly lose value. And if not for the colossal popularity of the brand and the corresponding revaluation, they would not have recovered so far.
The negative situation in the country's economy is the last and not the most unambiguous problem. On the one hand, loss-making securities should be disposed of, and on the other hand, there is a crisis in the country as a whole, so it will be the same in many industries and companies.
Here are the reasons for portfolio optimization. The optimization process itself is simple - sell securities as soon as you feel that you have squeezed the maximum out of them.
The main mistakes of beginners
Now let's talk about the two main mistakes of novice investors /
Mistake 1. Lack of purpose.
This is the most serious mistake that we talked about at the beginning of the article. Investing without a goal is simply losing your funds. If you do not understand why you want to invest your finances, you have nothing to do in the securities market.
Mistake 2. Deviation from the strategy.
Each investor forms his own investment strategy for himself. You can take someone else's, but over time, you still adapt it to your needs. You should always stick to your strategy, and there is only one case for deviation: it is unprofitable in the middle / long distance.
In order to understand whether you are making the right decisions, you will need at least a month. But if you change the principles and approaches to choosing securities every week, you can forget about profit.
Conclusion
Portfolio investment is a type of financial investment that is aimed primarily at making a profit. The object of portfolio investments can be securities, bank deposits, currencies, metals and real types of investments, which include real estate, shares in business, construction, start-ups, etc.
The main principle of portfolio investment is risk diversification. This means that you must divide your funds into several directions or securities. This is done in order to minimize losses and be able to safely get rid of this or that asset.
To start collecting an investment portfolio, you need to set a goal, find a broker and purchase the necessary securities. After that, you analyze the profitability of your securities, change them in case of negative indicators and enjoy the profit.
Remember that investing, even in the absence of special knowledge, most often brings profit.
portfolio income – English Portfolio Income, is a type of income that comes from one or more investments. The term "portfolio" usually refers to a set of various investment vehicles owned by a particular investor. An investment portfolio, for example, may include stocks, bonds, certificates of deposit, real estate, derivatives. The income received from investments may be in the form of interest (like bonds and certificates of deposit), dividends (like stocks) or other forms, provided that it is passive income from investment activities.
When choosing from a variety of investment vehicles, investors usually consider two factors: the return on investment and the level of risk. Stocks are usually considered quite risky investments, but they can generate income both from growth in value and from dividends that are paid to shareholders as a result of the distribution of profits. Bonds and certificates of deposit, in turn, generate income in the form of interest. Other types of investments can also generate income, the form of which depends on their nature.
Investors often invest their funds in several types of investments at the same time, which is called diversification. In this case, risky investments with a high rate of return and less risky investments with a low or moderate rate of return are combined. Such a set of many investments is called a portfolio, and the total income that it brings is called portfolio income.
Portfolio income is often recognized as passive income, since in most cases the investor does not make a targeted effort to receive it. That is, after making the initial investment, they generate income without the active participation of the investor. Portfolio income is distinct from active income, which is income derived from actively participating in or making direct expenditures of energy or time.
In order to provide themselves with additional income when they retire, many seek to do this through an investment portfolio. That is, these individuals hope to live off the interest, dividends, and other returns generated by their investments. As a rule, investment advisors recommend spending only portfolio income, but not touching the principal (the principal amount of the investment).
This means that if a certain person has invested his money, he should not touch it afterwards, but only spend the money that this investment brings. The disadvantage of portfolio income is that significant investments are required to form it in a significant amount, that is, the investor must accumulate a large amount, which takes a lot of time. At the same time, the advantage of portfolio income is that the investor will not be left completely without money, since in addition to current income, he always has a principal at his disposal.
