portfolio

(noun)

The group of investments and other assets held by an investor.

Related Terms

Examples of portfolio in the following topics:

  • Beta Coefficient for Portfolios

    • A portfolio's Beta is the volatility correlated to an underlying index.
    • A portfolio's Beta is the volatility correlated to an underlying index.
    • What would the following portfolios have for Beta values?
    • Thus, the portfolio would have a Beta value of 3.
    • Two hypothetical portfolios; what do you think each Beta value is?

  • Creating Online Portfolios

    • An online portfolio is a digitized, downloadable file that showcases accomplishments, talent, work, and other aspects that represent someone professionally and personally.
    • The use of online portfolios in the classroom has many advantages that benefit students in an increasingly digitized world.
    • As students become comfortable with managing an online portfolio, they can expand these skills to learn how to navigate websites and conduct research in a critical way.
    • Online portfolios are accessible to students at all levels of learning.
    • A an online portfolio tool (eFolio of Minnesota) that students can useas an online portfolio, to develop student responsibility for learning,and to develop more awareness in reflection of the essential elementsin the PYP.

  • Calculating Expected Portfolio Returns

    • A portfolio's expected return is the sum of the weighted average of each asset's expected return.
    • Let's say that we have a portfolio that consists of three assets, and we'll call them Apples, Bananas, and Cherries.
    • Where A stands for apple, B is banana, C is cherry and FMP is farmer's market portfolio.
    • In reality, a portfolio is not a fruit basket, and neither is the formula.
    • A math-heavy formula for calculating the expected return on a portfolio, Q, of n assets would be:

  • Portfolio Risk

    • The risk in a portfolio is measured as the amount of variance that investors can expect based on historical data.
    • Diversification may allow for the same portfolio expected return with reduced risk.
    • In this unit, we are talking about calculating the risk of a portfolio.
    • If our portfolio of investments has diversified away as much risk as is possible given the costs of diversifying, our portfolio will be attractive to investors.
    • If an institutional investor, such as a city pension fund, looked at two portfolios with identical returns and different risks, they would choose the portfolio that minimized its risk.

  • Portfolio Diversification and Weighting

    • Weighting is the percent allocation a particular investment type receives within a portfolio.
    • These objectives can range from specific to one particular industry to something that achieves a balanced portfolio of blended assets.
    • The idea of eliminating risk by spreading investments across pools of underlying stocks and bonds is called "diversification. " A diversified portfolio spreads investments across all asset classes with a weighting system that takes time frame and risk tolerance into account.
    • The "weight" is the proportion of that portfolio assigned to one category.

  • Implications for Variance

    • A diversified portfolio containing investments with small or negative correlation coefficients will have a lower variance than a single asset portfolio.
    • As you can see from the graphic below, there is still considerable risk to an investor who is heavily invested in stocks, even with a blended portfolio.
    • Had your portfolio consisted of a set of stocks that approximated the Nasdaq index, you would have lost roughly 52% of your portfolio's value (from 4069.31 to 1950.40).
    • A diversified portfolio containing investments with small or negative correlation coefficients will have a lower variance than a similar portfolio of one asset type.
    • Diversifying asset classes can reduce portfolio variance without diminishing expected return

  • Portfolios for Job Searches

    • Each portfolio comprised work completed over a 12-week period.
    • I require students to produce these portfolios for two reasons.
    • Second, portfolios can enliven and strengthen job selection procedures.
    • A high-caliber, comprehensive, graphically-pleasing portfolio takes time and meticulousness to prepare.
    • Portfolios should offer individualized content which presents an applicant's ideas and ability to think creatively.

  • Implications for Expected Returns

    • The expected return of a diversified portfolio is the expected return of each of its underlying investments times the weight the investment receives.
    • Asset allocation is the theory that any portfolio should have a set of target weights for different asset classes based on time frame and risk tolerance.
    • Let's say we have a portfolio of $100,000 that has a target mix of 60% stocks and 40% fixed income and, therefore, has $60,000 in stocks and $40,000 bonds.
    • At this point, we have a total portfolio of $110,600 and an asset mix of roughly 62% stocks and 38% bonds.
    • Assuming rebalancing, the expected return of a diversified portfolio is simply the expected return of each of its underlying investments times the allocation weight the investment receives.

  • Relationship Between Financial Policy and the Cost of Capital

    • Other facets include portfolio theory, hedging, and capital structure.
    • Portfolio theory is a mathematical formulation of the concept of diversification in investing.
    • It attempts to maximize the expected return of a portfolio, or a collection of investments, for a given amount of risk by carefully choosing the proportions of various assets.
    • In other terms, portfolio theory attempts to minimize risk for a given level of expected return.

  • Impact of Diversification on Risk and Return: Unsystematic Risk

    • Grandma wasn't telling you to grow up and be an omelet chef, she was actually giving you some sage advice that applies to your future as a portfolio manager.
    • Proponents of passive management say the market knows best, and they seek a portfolio that has an underlying pool that mimics a benchmark index (think S&P 500).
    • Research has shown that there is a clear advantage in any portfolio to hold at least 30 different positions.
    • Their approach was to consider a population of 3,290 securities available for possible inclusion in a portfolio, and to consider the average risk over all possible randomly chosen n-asset portfolios with equal amounts held in each included asset, for various values of n.