A portfolio management strategy refers to holding a collection of investments and focusing on the interaction between those investments as the primary way to determine trades.

These strategies tend to be designed for longer time horizons and begin by building a portfolio.

What is a Portfolio?

Your portfolio is a collection of investments that communicates your base strategy. It represents how much risk you would like to take, how you are diversifying your investments and showcases your outlook on the markets.

You can think of a portfolio like a recipe, where each investment is an ingredient. Just like you'd determine how much salt to put on your meal, you'll choose how much exposure/weight you want each investment to hold in your portfolio. 

Starting Tips for building your first portfolio: 

  • Learn about different countries, industries, and securities and how to use diversification
  • Understand your own risk tolerance and choose investments that fit your profile
  • Write down your portfolio strategy, using % weighting for each security:

Rebalancing: Maintaining your Portfolio

As the prices of each of your investments change the composition of your portfolio changes as well. You will want to monitor your portfolio to ensure it is still communicating your intended strategy. If things have changed too much, you will want to buy and sell to readjust the weights of investments in your portfolio. This is called "rebalancing."

As a portfolio manager, you are most concerned with how the composition of your portfolio is changing, rather than the profits or losses of a specific investment.

We challenge you to try launching your first portfolio!


For additional learnings, check out these articles:
What is the diversification score?
How do I build a basic portfolio?



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