The Elements of a Good Portfolio


If you're new to investing, you may not know where to start when it comes to creating your portfolio. While it may seem daunting, it doesn't have to be hard. While it's important to put together a portfolio that best suits your needs, you may not know exactly how to do that. Luckily, there are a few different ways to make a portfolio that works for you.

What is a Portfolio?

Your portfolio is a collection of your investments. This can include stocks, ETFs, bonds, and mutual funds. Other assets, like your investment accounts, can also be considered part of your portfolio. This is more of an idea than a physical collection, though—there is no one place all of your assets and securities should live for them to be part of your investment portfolio. Even still, it's a good idea to keep a record of your investments in one place, so it's easier to track and locate all of them. This can also help you budget and keep up with how much you're allocating for each account or investment.

Determining What to Include

With so many choices, how do you choose? Assessing your risk tolerance can be a great first step. When you know how much you are able to allocate toward investing and how much you can withstand losing, you can figure out which investment products fit your budget. If you're able to take a significant loss and have a lot of time to spend focusing on your investments, you might benefit from an aggressive portfolio. If you'd rather limit loss and don't have as much time to spend on your investments, a more conservative portfolio would be a better fit.

Once you've completed your assessment, researching different types of products that fit your risk tolerance can give you an idea of which companies you might like or feel comfortable potentially investing in, and can narrow down what you're looking to get out of your portfolio. Additionally, you can explore portfolio diversification when considering what to include. This can help protect against significant loss, as putting all your eggs in one basket can leave you at a higher risk than having a wide array of different investment products.

It's possible that over time, your portfolio might need rebalancing. Since stock prices are impossible to predict and can fluctuate, you may find that your portfolio is no longer as evenly spread out as it was when you initially created it. Every once in a while, you should check in with your portfolio to ensure that your funds are still allocated the way you want them. If not, you can consider taking the time to rebalance your investments.

It's crucial to keep in mind that a good portfolio is not the same for everyone. What makes a good portfolio will be personal to you and your unique financial situation—a good portfolio will have the most potential benefit to you. Also, don't forget that every investment involves risk and there's no way to guarantee profit—so, when making your selections, choose wisely, and be certain that you're confident in the portfolio you've made.

Using a Smart Advisor

If you'd rather not put your portfolio together yourself, there's always the option to use a smart advisor. With a smart advisor, all you need to do to get started is fill out a risk questionnaire, and the automated service will develop a portfolio on your behalf with products that align with your risk profile. If you're looking for a low minimum investment and hands-off portfolio monitoring, this could be a great option for you. With a smart advisor, the stress of decision-making is taken off your plate. An automated portfolio can keep you in the investing game without the pressure of needing to spend too much of your already busy day keeping tabs on your investments.

No matter whether you decide to create your own portfolio, or have a smart advisor do it for you, take the time to make sure your investments are right for you.

Disclaimer: Securities trading is offered to self-directed customers by Webull Financial LLC, member SIPC, FINRA. All investments involve risk, including the possible loss of principal. You should consider your investment objectives carefully before investing. This is not a recommendation, investment advice, or a solicitation for the purchase or sale of a security. Additional info: