Reviewed by Sep 30, 2020| Updated on
A portfolio investment is a passive investment of securities in a portfolio made with the expectation of earning a return. The returns earned are directly proportional to the risk involved. There are additional return calculations, such as money-weighted returns.
Understanding Portfolio Investment
A portfolio investment is a strategic investment process. Portfolio investment differs from direct investment as the latter takes a sizeable stake in a target company and incurs day-to-day management.
Factors to Consider
The composition of investments in a portfolio may depend on a number of factors, such as investment horizon, investors risk tolerance, and the amount invested.
A young investor with limited funds can choose mutual funds or exchange-traded funds as they may be the appropriate portfolio investments.
For a high-net-worth person, it includes commodities, real estate, and timber.
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Shariah-compliant funds are funds that follow the principles of Shariah law. Read more
Yield or bond yield points to the returns provided and realised by an investor on his investment over a given timeframe. Read more
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