Finance is full of common terms that are used in everyday conversation and analysis. If you’re new to the world of finance and investing, the term portfolio might be a word you hear about often.
We’ll help you understand what a portfolio means, explore different investment philosophies and how Cube helps you build the perfect portfolio.
What Is An Investment Portfolio?
An investment portfolio is a basket of securities that contains investments like mutual funds, US stocks, Indian stocks, alternative assets, digital gold, and more.
It’s like a grocery cart that contains various products (investments) of different sizes (portfolio asset allocation) each with its own functionality, flavour, and colour (diversification).
What Are The Types Of Investment Portfolios?
1. Income Portfolio
An income portfolio generally consists of stocks like Intel or Johnson & Johnson that pay a dividend and bonds that can generate a fixed income through coupons.
Income portfolios are often misconstrued to be regular cash-generating portfolios. But they are not. The reason is simple - dividends and coupons are reinvested by default.
You’ll have to pay a dividend tax if you want the dividends delivered to your bank account. But dividend and coupon payments are less volatile than future stock prices because they are promised by the company.
A value portfolio follows the fabled value investing approach popularized by Warren Buffet. The logic is to invest in companies that have a strong balance but are trading below their intrinsic value.
The markets may be slow to realise the potential of these stocks or investor sentiment may have been swayed elsewhere due to which these shares may trade below their intrinsic value.
A value portfolio can include large-cap, mid-cap, small-cap stocks and funds along with ETFs. The overall aim is to hold these investments for the long term to generate returns through a mixture of dividends and capital growth.
How To Build A Perfect Investment Portfolio?
The Cube Wealth app helps you build the perfect portfolio of assets from the world of US stocks, mutual funds, digital gold, and alternative assets. Cube does this with the bucket philosophy or 9-box model for:
Short-term (0-3 years)
Medium-term (3-5 years)
Long-term (5+ years)
The assets on Cube Wealth are recommended by experts like Wealth First who have a track record of beating Nifty by ~50% over the past decade and RIA Rick Holbrook who manages ~$130 million for HNIs.
on stock picking, poring over excel sheets, financial news, analyzing market trends, tracking the Sensex, researching company fundamentals, comparing mutual funds, reading financial reports, trying to predict the future & losing your sanity!