Investment portfolio: everything from A to Z

What is an investment portfolio? What are the basic principles of forming an investment portfolio? What role does an investment portfolio play in the HYIP industry?

If a businessman invests in several financial objects at once, then in this way he forms his investment portfolio. In essence, the latter is a package of assets that is used to make a profit. At the same time, assets can have a wide variety of forms: from material gold bars to securities. They are distributed in one direction or another in order to achieve the most acceptable diversification. We will talk about this concept, as well as how to form an investment portfolio, in more detail later.

Investment portfolio formation principles

A deliberate diversification distinguishes an investment portfolio from a conventional investment. This word refers to investing in specific instruments in order to reduce overall risk and increase profitability. The choice of directions for investment is largely determined by the strategy of a businessman. In any case, you should not limit yourself to one single one in order to prevent a sudden collapse. After all, not a single sector of the market economy is immune from the crisis.

Reasonable portfolio creation involves setting a specific goal, taking into account possible risks. Based on the basic principles of formation, assets should be distributed to achieve this goal in the shortest possible time. These principles include the following:

• Adequate assessment of the capabilities of assets for the implementation of the set strategy;
• The choice of objects for investment should be made on the basis of the above assessment;
• The desire to optimize profitability in relation to the existing risk, as well as liquidity;
• Implementation of portfolio management.

Briefly titled these principles, they will sound: asset security, liquidity of funds and income generation. Between these postulates one has to constantly maneuver, since it is impossible to observe them at the same time. In particular, the lower the yield, the higher the reliability of assets. Therefore, a businessman has to look for a balance and form an optimal investment portfolio in order to secure his investments as much as possible. This is the key to a successful and long-term presence in the market, because even if one of the projects fails, the rest compensate for the losses.

Varieties of investment portfolios

Depending on the ratio of potential risks and the projected return on investments, experts distinguish the following types of portfolios:

1. Conservative. It belongs to the most reliable investment options, since it involves an emphasis only on stable sources of income. These can be shares of successful corporations that have been operating on the market for a long time. Government bonds. However, the rate of return will be very small. Conservatives, first of all, are interested in the safety of their own funds;
2. Aggressive. Assumes the maximum degree of risk, but at the same time promises high returns. Aggressive players often include speculators who are ready to make lightning-fast decisions for the sake of quick profit. The view of such investors is directed to the shares of promising, but little-known companies. Whose profitability can grow extremely fast;
3. Moderate. If the balance of the two previous options is observed, it is possible to achieve a moderate one, characterized by average values ​​of risk and return. The emphasis here is on the shares of medium and large companies, whose growth is more or less stable.

Since there is no perfect recipe for success, it is necessary to monitor the market regularly. By adjusting his portfolio, a businessman has the opportunity to respond to market changes in a timely manner. For example, in the context of the growing dynamics of the latter, it makes sense to invest in the securities of companies. And, conversely, in a falling market, you should pay attention to more reliable government bonds.

Investment portfolio for HYIP

The most highly profitable areas for investing assets include HYIP projects. They are created with one single purpose - to attract investors' funds, and then, at one fine moment, withdraw them. This fraudulent technique (the so-called scam) is activated when the interest payments on deposits in total become more than the inflow of new investments. Following the usual logic, a long-term project with an uninterrupted payout system could be called a good hype.

In addition to the creator of such a project and, in fact, the contributor, there is also a third party in the hype - an information website in one form or another. His driving role in the promotion of the program is very high.

Recommended reading:

• What is HYIP?
• How to make money on HYIP?

The reward for the investor's risk of being deceived is the potential for greater profits. To minimize these risks, it is recommended to create a portfolio of several such HYIP projects. Where the share ratio of contributions will be determined by the degree of trust in each of the projects. However, this requires serious research. After all, long-term HYIPs can provide a businessman with a higher level of income than a banking institution. You just need to find them.

Instead of the total

Creating an investment portfolio requires some mental work from the investor. He needs to develop his own strategy, consider all available investment options, and then evaluate their key indicators. After the analysis, a competent diversification of assets should be carried out.