1 / 11

Portfolio DIVERSIFICATION

Portfolio DIVERSIFICATION. Investment Principal #1. What is a portfolio?. Single investment mixing stocks/bonds. A special type of loan. Highly-liquid investments. Ownership in a company. Used for saving. The collection of investments you personally hold. What is diversification?.

armina
Download Presentation

Portfolio DIVERSIFICATION

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Portfolio DIVERSIFICATION Investment Principal #1

  2. What is a portfolio? Single investment mixing stocks/bonds A special type of loan Highly-liquid investments Ownership in a company Used for saving The collection of investments you personally hold.

  3. What is diversification? Diversification is owning a collection of investments in order to spread risk and have a safer investment overall.

  4. What is diversification? Diversification is owning a collection of investments in order to spread risk and have a safer investment overall.

  5. Types of markets Bull Market = growing market Bear Market = slow market Stocks do well. Bonds and money markets do well.

  6. How do I diversify? • Know your own style How much do you know about investing? Do you like to take risks? • Research What investment options are available to you? • Figure out your time horizon How long do you have to invest before you need your money? • Practice Use Wall Street Survivor and the Virtual Business Sims before it’s your own hard-earned money on the line!

  7. Step 1 – Know Your Style • How much do you know about investing? • Beginner, Intermediate or Advanced? • Do you like to take risks? • Take the investment risk tolerance quiz.

  8. Step 2 - Research Less Risk More Risk

  9. Step 3 – Time Horizon Short Horizon <1 year Intermediate Horizon 1-9 years Long Horizon 10+ years Money Markets Bonds Stocks Less Risk More Risk

  10. STEP 4 - Practice • Simulation Lesson 15 – Diversification • Portfolio Check 1 • List your risk tolerance • At least 95% invested in stocks • At least 7 sectors • No more than 30% in any one sector • Proper mixture of large capitalization and small capitalization stocks for your risk tolerance

  11. Portfolio Check 1 At least 7 sectors No more than 30% of portfolio $1,000 to $5000 in Cash Must match your risk tolerance.

More Related