Glossary

A portfolio is a collection of financial assets, such as stocks, bonds, cash, or other investments, owned by an individual, company, or fund.

The primary goal of a well-diversified portfolio is to minimise risk while maximising returns, striking a balance between high and low-risk investments. A diversified portfolio helps spread risk across various assets, reducing the impact of any single underperforming investment. 💼

For example, an investor's portfolio might include shares of Apple, Microsoft, government bonds, and real estate investments.

Fun fact: The modern portfolio theory, developed by Harry Markowitz in the 1950s, is a cornerstone of investment strategy. It suggests that an optimal portfolio can be constructed by considering each asset's expected return, volatility, and correlation with other assets. 📈🧠