Portfolio
The complete collection of investments you hold — stocks, bonds, cash, and other assets together.
A portfolio is the total set of financial assets an investor or trader holds. It can include stocks, bonds, ETFs, options, cash, real estate investment trusts (REITs), and any other securities.
Portfolio management involves balancing risk and return across positions. The correlation between assets matters: holding assets that move together offers little diversification benefit, while holding uncorrelated assets reduces overall portfolio volatility.
Performance is measured relative to a benchmark — if the S&P 500 returns 15% and your portfolio returns 12%, you underperformed by 3% on an absolute basis (though risk-adjusted returns may tell a different story).
Related Terms
Asset
Anything with economic value that can be owned, traded, or used to generate returns — stocks, bonds, currencies, commodities, crypto.
BeginnerAsset Allocation
How you divide your portfolio across asset classes — stocks, bonds, cash, alternatives — to balance risk and return.
BeginnerBenchmark
A standard index or rate used to evaluate investment performance — the S&P 500 is the most common equity benchmark.
BeginnerCapital Gain
The profit made when you sell an asset for more than you paid. Short-term and long-term gains are taxed differently.
BeginnerDiversification
Spreading capital across uncorrelated assets to reduce risk. When one position falls, others cushion the blow.
BeginnerReturn on Investment (ROI)
Net profit as a percentage of the capital invested. The universal yardstick for comparing investment performance.
Beginner