In the financial sector an investment portfolio is a collection or basket of weighted set of assets. The holder has a finite amount of cash and wishes to optimise the profit of this portfolio.
How do you create a portfolio?
- Have money to invest in something
- A broker that can execute on your behalf this can be an online broker or one where you need to call to place orders
- Open an account
- Analyse and allocate percentage of your money to the shares you want to buy
Yahoo is a very good tool for building dummy portfolios. This does not send your trades to the broker. Below is a dummy portfolio to illustrate a portfolio construction.
How you select the stocks to put into your portfolio is a whole new discussion.
Suppose I had $14,000 in 2019, I decided to buy some stock. Having done some analysis I allocate a proportion of my capital to purchasing the stocks. Below is my percentage allocation and the date of purchase.
|Stock||Trade Date||Purchase Price||Quantity||Commission||Total Cost/share||Portfolio %|
As of today this dummy portfolio will be worth just over $22,000 a rise year on year of 65%.
Note: For the purpose of this exercise all the stocks are in the US stock market and are denominated in dollars. There are no other asset type.