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An investment portfolio is a collection of investments that a person has taken a risk on with the hopes of gaining a profit. Risks are classified based on the odds of losing or gaining money. If you make a high-risk investment, you have a greater chance of losing your money than you would if you made a low-risk investment. The investments in a portfolio are generally categorized based on the amount of risk involved. Low-risk investments provide a lower yield for your money, and high-risk investments have a higher yield. Mutual funds and money market accounts are examples of low-risk investments. Stocks and high-yield bonds are high-risk investments.
When creating your investment portfolio, it is best to select a wide variety of investments so that you do not have all of your money invested in one location. This also lowers your risk of losing too much money at one time. If one investment fails, you can redistribute your other investments to gain your money back faster. For a safer portfolio, you would invest the majority of your cash into low-risk investments, which will prevent additional losses in the immediate future.
Business.com is an excellent source and has a lot of additional information on starting an investment portfolio. Click on the provided links to receive more information.