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What is a Portfolio?

Matthew Levy
Matthew Levy

An investment portfolio represents all of the investments an individual or entity owns¹ and could consist of financial investments, including stocks, bonds, real estate, mutual funds, and other securities.² On top of this, a portfolio could also include private assets like art, real estate, and other private investments.³

What makes investor portfolios different from one another?

Portfolios can differ drastically based on individual investor characteristics. Let’s look at two contributing factors:

  • Risk tolerance is how willing you are to accept investment losses in exchange for the potential of higher returns.² Time horizon is one way to assess your risk tolerance.
  • Diversification means spreading your investments across industries and geographical regions in order to reduce overall risk. This helps that your portfolio’s performance isn’t overly dependent on any particular asset.2

Investors who have a large portfolio but don’t understand the nuances of investing can also seek the help of a portfolio manager or wealth manager. The manager helps keep track of the assets within the portfolio and decides which risks are appropriate depending on the investor's risk tolerance and other objectives.


Maxine has joined a company in which she will earn a yearly salary. Maxine is in her early 30s and would like to begin investing. She begins to explore different portfolio options that align with her financial goals and individual risk tolerance.


  1. Investing Basics: What is a Portfolio? Forbes.
  2. What is a Portfolio? NerdWallet.
  3. What is a Portfolio? Clyde Bank Media.

Please note that this article is for general informational purposes only. All examples are for illustrative purposes only. The views and opinions expressed are those of the author and do not reflect or represent the views and opinions of Alpaca. Alpaca does not recommend any specific securities or investment strategies.

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.

Brokerage services are provided by Alpaca Securities LLC ("Alpaca Securities"), member FINRA/SIPC, a wholly-owned subsidiary of AlpacaDB, Inc. Technology and services are offered by AlpacaDB, Inc.

This is not an offer, solicitation of an offer, or advice to buy or sell securities, or open a brokerage account in any jurisdiction where Alpaca Securities is not registered (Alpaca is registered only in the United States).


Matthew Levy

Matthew Levy is a Chartered Financial Analyst (CFA) designation holder, a former portfolio manager for $600+ MM in assets, and started his own business writing financial analysis for clients worldwide