Definition
A portfolio is a collection of financial assets held by an individual or institution, such as stocks, bonds, real estate, or other investments. The assets are chosen to balance risk and return based on the investor’s goals, time horizon, and risk tolerance.
Why It Matters
Portfolios matter because diversification across different assets can reduce overall risk while improving long-term returns.
Example
An investor holds a portfolio made up of stocks, bonds, and mutual funds to spread risk.