An investment portfolio is a list of financial assets. The list includes various types of accounts, certificates of deposit, individual retirement accounts, real estate, stocks, bonds, jewelry, and different types of savings.
An investment portfolio not only ensures the financial security of investors in the post retirement period, but it also provides the means to leading a debt free retirement.
Before creating an investment portfolio, an investor should have a cash reserve. This is very important for those who start an investment. The cash reserve is of great use at the time of emergencies.
According to experts, cash reserves must be enough to meet living expenses for at least six months and the reserve should be in liquid form. Investors also need to have insurance policies which will meet their needs. The investment portfolio should be chosen in accordance with a customers individual needs in mind, and their financial capacity.
Preferred investment options:
- Stocks: It is probably the most popular of all investment options. The growth rate in this market ranges between 10-12%. In recent years, the stock market has provided nearly 20% growth to investors. This market has always been a risky option, but long term investors have done well in this market.
- Mutual Funds: This is the safest option for beginners in the field of investment. The mutual funds are used to collect money from different investors. The fund manager invests the money in different mediums such as shares, and bonds. Mutual funds facilitate investment diversification, which is necessary for providing security as well as an excellent growth rate to the investment.
- Bonds: This is also a form of investment. Investors provide funds to companies or to governments and receive back the amount with interest.
Some investors invest in gold and money markets. Real estate investment is also a popular form, and many investors prefer to include this option in their investment portfolio.