Meaning and composition
An investment portfolio is a group of assets and positions analyzed as one whole. It may include shares, bonds, cash and other instruments. The overall result depends not only on each position, but also on weights, relationships, expenses and management rules.
Goals, concentration and management
If an investor holds shares for long-term growth and accessible cash for near-term expenses, those parts serve different purposes. A sharp rise in shares can change the portfolio’s composition and increase overall risk even without new purchases. It is therefore important to review the structure periodically rather than look only at the profit from individual trades.
A portfolio is not necessarily diversified merely because it contains many line items. Different funds may repeat the same underlying assets. Several accounts with intermediaries do not automatically change the economic concentration. For management, define the goal, horizon, acceptable losses, contribution rules and rebalancing rules, while keeping a separate reserve for unexpected expenses. Related reading: [portfolio risk](/guides/portfolio-risk/), [diversification](/guides/diversification/) and [rebalancing](/glossary/rebalansirovka/).