MEANING OF PORTFOLIO : Portfolio means combined holding of many kinds of financial
securities i.e. shares, debentures, government bonds, units and other financial assets. The
term investment portfolio refers to the various assets of an investor which are to be
considered as a unit.
It is not merely a collection of unrelated assets but a carefully blended asset combination
within a unified framework. It is necessary for investors to take all decisions as regards
their wealth position in a portfolio context. Making a portfolio means putting one’s eggs in
different baskets with varying elements of risks and return. Thus, a portfolio is a
combination of various instruments of investments. It is also a combination of securities
with different risk-return characteristics. A portfolio is built up out of the wealth or income of
the investor over a period of time with a view to manage the risk-return preferences. The
analysis of the risk-return characteristics of individual securities in the portfolio is made
frpm time to time and changes that may take place in combination with other se, urities are
adjusted accordingly. The object of portfolio is to reduce risk by diversification and
maximise gains.

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