What is an Investment Portfolio?
An Investment portfolio is a collection of Investment held by an individual investor or financial institution. The portfolio typically includes stocks, bonds, mutual funds, exchange-traded funds (ETFs), and other Investment. The goal of an Investment portfolio is to generate returns for the investor.
By definition, all index funds are passive because their holdings track a market index and do not require active management. For investor seeking higher returns, active management, at least for part of your stock portfolio, is an option. Active management involves selecting stocks based on research or the manager's own strategies.
A common definition of diversification is “not keeping all your eggs in one basket.” A diversified portfolio can help protect against market downturns and can provide higher returns. For instance, the investor who bets their portfolio on a single stock may be unable to recoup their losses in the event of a market crash. By diversifying, investor can spread out their risk and create a more secure portfolio.
To get rich, you need to start by defining exactly what rich means to you, and then create a plan to reach that goal. Investing can help grow your wealth, but it’s not the only thing you need to do. Consider speaking with a financial advisor to help you maintain your Investment portfolio.
In recent years, there has been increased focus on the importance of building a diverse and inclusive Investment portfolio. A common definition of diversity facilitates the measurement of progress towards achieving a truly diverse and inclusive portfolio. This can be measured by examining factors such as gender, ethnicity, and socio-economic status.
“Andrew Lo: Finding the Perfect Portfolio—a 'Never-Ending Journey,'” is an article written by Andrew Lo, a professor at MIT. In this article, Lo outlines the challenges in selecting the perfect portfolio. He states that even though players attempt to beat the market, they are often disappointed with the results. So, the players still by definition underperformed by the cost of the Investment.
So it's prudent for any portfolio manager to consider risk, particularly the risk associated with socially responsible Investing. Socially responsible Investing, also known as ethical Investing, takes into account environmental, social, and governance factors. There's no simple, overriding definition of what constitutes socially responsible Investing. It's up to Investment managers to assess and decide which Investment are considered to be socially responsible.
In addition, proposals on the fund fee disclosure and reform rule — which would require greater transparency around the custody of client assets by Investment advisors — have been released. This is an important issue, as investor must be able to trust that their assets are secure.
At Schroders, we define Impact Investing (aligned with the United Nations Sustainable Development Goals) as “Investing with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.” We believe that helping investor understand how their overall retirement Investment portfolio is a significant value-add.
Finally, foreign Investment in India is regulated by the Securities and Exchange Board of India (SEBI). This is subject to certain conditions, including that such Foreign Portfolio investor (FPI) will be allowed to invest in mutual fund schemes other than the ones listed on the Indian stock exchanges.
