Do you, like me, think that you have a heavy portfolio? So know that we are very lucky. If you lived a hundred years ago, you would walk around with a knapsack made of sealskin. It was not easy to put him on your shoulders!

There have been disciples at all times, and portfolio history is a little over a century old. Why? But imagine: a long time ago, thousands of years ago, people wrote on clay tablets. And "books" and "notebooks" were kept in huge chests or hefty earthenware vessels. What a portfolio!

Later, when papyrus was invented in ancient Egypt, it could be glued into scrolls. I did my homework, rolled up the scroll and put it in - no, not in my briefcase. And in a special round pencil case, which was worn on a cord at the waist.

And then the Chinese invented paper. From China 800 years ago, she came to Europe. In Europe, a bag for carrying papers was invented - a briefcase. Then they said "portfolio", which literally means "to carry sheets of paper."

And here twin brother of the briefcase - knapsack- came to us together with hired German soldiers who served with the Moscow tsars. This was the name of the backpack bag. In the 19th century, student bags began to be called knapsacks, which Russian schoolchildren wore on straps behind their backs. Before the revolution, knapsacks in Russia were made of black leather with a lid trimmed with seal fur. Stuffed with notebooks and books, the backpack became almost unbearable.

After the First World War, more and more students collected books and notebooks in portfolios. Although many schoolchildren went to classes with battered field bags inherited from relatives who returned from the front. It was convenient to throw such bags over the shoulder and use them in case of fights.

For a long time briefcases and knapsacks were very similar in color and size. Today, schools are full of backpacks of various colors and shapes: reflective and orthopedic, with a bunch of pockets and secret compartments, with cartoon characters and neon inserts.

Now scientists are developing electronic school bags that can replace textbooks, notebooks, diaries. In such a knapsack you can store several dozen textbooks with pictures, and it weighs a little more than one kilogram! After all, such a satchel looks like a tablet personal computer.

A portfolio type is its investment characteristic based on the ratio of return and risk. At the same time, an important feature in classifying a portfolio type is how and from what source this income was received: due to an increase in the market value or due to current payments - dividends, interest.

There are two main types of portfolio: a portfolio focused on primarily receiving income from interest and dividends (income portfolio); a portfolio aimed at the primary increase in the market value of the investment assets included in it (growth portfolio). It would be simplistic to understand the portfolio as a kind of homogeneous aggregate, despite the fact that the growth portfolio, for example, is focused on stocks, the investment characteristic of which is the growth of market value. It may also include securities with other investment properties. Thus, the portfolio of growth and income is also considered. On fig. 1.3. the classification scheme of portfolios according to the above criterion is given.

Rice. 1.3.

Consider the main types of portfolios.

growth portfolio. The growth portfolio is formed from the shares of companies whose market value is growing. The purpose of this type of portfolio is to increase the capital value of the portfolio along with the receipt of dividends. However, dividend payments are made in a small amount, so it is the growth rate of the market value of the aggregate of shares included in the portfolio that determines the types of portfolios in this group.

Aggressive growth portfolio aimed at maximizing capital gains. This type of portfolio includes stocks of young fast-growing companies. Investments in this type of portfolio are quite risky, but at the same time they can bring the highest income.

Conservative Growth Portfolio is the least risky among the portfolios of this group. Consists mainly of the shares of large, well-known companies, characterized by low, but steady growth rates of market value. The composition of the portfolio remains stable over a long period of time and is aimed at capital preservation.

Medium growth portfolio is a combination of investment properties of portfolios of aggressive and conservative growth. This type of portfolio includes, along with reliable securities purchased for a long period, risky stock instruments, the composition of which is periodically updated. At the same time, an average capital gain and a moderate degree of investment risk are provided. Reliability is provided by securities of conservative growth, and profitability - by securities of aggressive growth. This type of portfolio is the most common portfolio model and is very popular with high-risk investors.

income portfolio. This type of portfolio is focused on obtaining high current income - interest and dividend payments. The income portfolio is made up mainly of stocks, characterized by a moderate increase in market value and high dividends, bonds and other securities, the investment property of which is high current payments. A feature of this type of portfolio is that the purpose of its creation is to obtain an appropriate level of income, the value of which would correspond to the minimum degree of risk acceptable to a conservative investor. Therefore, the objects of portfolio investment are highly reliable stock market instruments with a high ratio of consistently paid interest and market value.

Portfolio of regular income is formed from highly reliable securities and brings an average income with a minimum level of risk.

Profit portfolio consists of high-yield corporate bonds, securities that bring high returns with an average level of risk.

Portfolio of growth and income. The formation of this type of portfolio is carried out in order to avoid possible losses in the stock market, both from a fall in the market value, and from low dividend or interest payments. One part of the financial assets included in this portfolio brings the owner an increase in capital value, and the other part - income. The loss of one part can be compensated by the increase of another. Let us characterize the types of this type of portfolio.

Dual purpose portfolio. This portfolio includes securities that bring its owner a high income with an increase in invested capital. In this case, we are talking about securities of dual-purpose investment funds. They issue their own shares of two types, the first bring high income, the second - capital gains. The investment characteristics of the portfolio are determined by the significant content of these securities in the portfolio.

Balanced portfolio implies a balance not only of income, but also of the risk that accompanies transactions with securities, and therefore, in a certain proportion, it consists of securities with a rapidly growing market value and high-yield securities. High-risk securities may also be included in the portfolio. As a rule, this portfolio includes ordinary and preferred shares, as well as bonds. Depending on market conditions, most of the funds are invested in certain stock instruments included in this portfolio.

At the stage of portfolio formation, the investor evaluates the combination of risk and income of the portfolio that is acceptable for him and, accordingly, determines the share of the securities portfolio with different levels of risk and income. This task follows from the general principle that operates in the stock market: the higher the potential risk a security bears, the higher the potential income it should have, and vice versa, the more certain the income, the lower the rate of return. This problem is solved on the basis of an analysis of the circulation of securities in the stock market. Basically, securities of well-known joint-stock companies with good financial indicators, in particular, a large amount of authorized capital, are purchased.

If we consider the types of portfolios depending on the degree of risk that the investor accepts, then it is necessary to take into account the classification of the investors themselves, for example, into conservative, moderately aggressive, aggressive and irrational. Each type of investor will have its own type of securities portfolio: highly reliable, but low-yielding; diversified; risky, but highly profitable; unsystematic (Table 1.2).

Aggressive investors- Investors who are prone to a high degree of risk. In their investment activities, they focus on the acquisition of shares. Such investors are aimed at getting the maximum exchange rate difference from each transaction, where there is always a high risk and the investment period is limited.

Conservative investors-- Investors who tend to take less risk. They purchase mainly bonds and short-term securities. Conservative investors are interested in receiving a stable income over a long period of time. They prefer a continuous stream of payments in the form of dividend and interest payments.

Relationship between investor type and portfolio type

Table 1.2

investor	Purpose of investment		Type of security	portfolio
Conservative	Inflation Protection		Government securities, shares and bonds of large stable issuers	Highly reliable but low income
moderately aggressive	Long-term investment of capital and its growth		A small share of government securities, a large share of securities of large and medium-sized, but reliable issuers with a long market history	diversified
Aggressive	Speculative game, the possibility of rapid growth of invested funds		A high proportion of high-yield securities of small issuers, venture capital companies, etc.	Risky but highly profitable
Irrational	No clear goals		Randomly selected securities	Unsystematic

There are other approaches to the classification of investors. For example, they are divided into speculators, rentiers, owners and investors.

Speculators. Investors who have sufficient funds so that the income from operations with them covers their current expenses and allows them to increase capital. They have significant experience in working with securities. In most cases, these are former employees of financial institutions who have professional experience in the stock and (or) financial market. They often manage not only their own portfolio of securities, but also the portfolios of other investors. They adhere to a fairly aggressive speculative strategy, preferring to “scalp” the market by conducting short-term and medium-term operations and spend a significant part of their working time on operations with their own portfolio. From a psychological point of view, in addition to the main goal (maximizing profit), they also satisfy their interest in the “game”. They treat operations in the stock market as an art to use the features of its behavior.

Rentier. They do not use operations in the stock market as the main source of current income, but use them mainly to increase capital. As a rule, the majority are people who have experience in financial markets, but are currently either not directly connected with them, or do not have the opportunity (or desire) to devote enough time to their own portfolio for active speculative play. Rentiers usually do not have the opportunity or time to track all market fluctuations in the short term. Therefore, they conduct medium-term operations, although in some cases they are also able to do intra-weekly and even intra-day arbitrage. However, the main and only goal of such investors is to receive a high income, exceeding the income from any other alternative investment of funds and not requiring too much time and effort. As a rule, by the nature of their current activity, they often make strategic decisions (such as buy-sell), but they prefer to lay the technical work and a detailed analysis of the situation on the shoulders of professionals. Thus, the basis of the rentier strategy is the assumption that operations should provide more income than other operations, but their implementation should not take too much time. Therefore, rentier operations are not too frequent.

Investors-owners. They have significant resources. They acquire significant packages of securities that can provide them with additional benefits (significant dividends, participation in management, lending, etc.). This group is small, but accumulates large funds. Their behavior in the stock market is based on medium- and long-term strategies, funds are invested for a significant period of time, and the main result is a high, but necessarily guaranteed return. Representatives of this group of investors are more than others interested in equilibrium in the market and are ready to give up part of speculative income for this.

Contributors. An unorganized part of the market that, guided by information gleaned from, for example, media or advertising, has decided to participate in a business in the stock market. The most active and enterprising then become speculators, rentiers or owners. In most cases, the transactions of depositors with securities are not much different from their transactions with deposits. Funds are invested in securities for a certain period of time or until a certain return on investment is reached, and then withdrawn. The main goal of the depositor is to receive “super profits”, which, as a rule, he does not know how to earn, but he heard that it can be obtained from operations with securities. Depositors have great potential value for stock market operators. With cumulatively large funds, they are most suggestible through advertising. Depositors are the least professional and bear additional risks. Having received losses, they leave the market quickly enough to never deal with securities again.

When buying shares and bonds of one joint-stock company, an investor should proceed from the principle of financial leverage, which implies the fulfillment of certain ratios between the volumes of bonds and preferred shares, on the one hand, and ordinary shares, on the other. Financial leverage is an indicator of the financial stability of a joint-stock company, which is also reflected in the return on portfolio investments. A high level of leverage is a dangerous phenomenon, as it leads to financial instability.

For example, a joint-stock company issued 10% bonds worth 10 million rubles, preferred shares - 2 million rubles. with a fixed dividend of 40% and ordinary shares - by 20 million rubles, i.e. the shares of the company have a high level of leverage:

The company's profit is 2.2 million rubles. and is distributed as follows. For the payment of interest on bonds - 1 million rubles, for dividends on preferred shares - 0.8 million rubles, for dividends on ordinary shares - 0.4 million rubles. If the profit drops to 1.1 million rubles, then the joint-stock company will not only “eat” what was intended to pay dividends on ordinary shares, but will also not be able to pay dividends on preferred shares at the expense of profit. A further decline in profits will lead to a shortage of funds to pay interest on bonds. This is the danger of highly leveraged stocks and the main weakness of those companies that have a large amount of debt in the form of bonds and preferred shares. Cautious investors usually avoid buying such securities.

In table. 1.3 the possible structure of portfolios of different investors is given as an example.

In the further classification of the portfolio, the structure-forming features can be those investment qualities that will be acquired by the totality of securities placed in this portfolio. With all their diversity, some of the main ones can be distinguished: liquidity or tax exemption, sectoral regional affiliation.

Table 1.3

Approximate portfolio structure(%)

Such an investment quality of a portfolio as liquidity, as you know, means the ability to quickly turn the portfolio into cash without losing its value. This problem is best solved by money market portfolios.

Money market portfolios. This type of portfolio aims at total capital preservation. The composition of such a portfolio includes mainly cash or quickly realizable assets.

It should be noted that one of the “golden” rules of working with securities says: you cannot invest all your funds in securities - you must have a reserve of free cash to solve investment problems that arise unexpectedly.

The data of economic analysis confirm that, under certain assumptions, the desired amount of funds intended for unforeseen purposes, as well as the desired amount of funds for transaction needs, depend on the interest rate. Therefore, the investor, by investing part of the funds in the form of money, ensures the required stability of the portfolio. Cash can be convertible into foreign currency if the rate of the national currency is lower than that of the foreign one. Thus, in addition to saving funds, an increase in invested capital is achieved due to the exchange rate difference.

have high liquidity and portfolios of short-term funds. They are formed from short-term securities, i.e., instruments circulating on the money market.

A portfolio of tax-exempt securities. This portfolio contains mainly government debt and assumes the preservation of capital with a high degree of liquidity. The domestic market allows you to get the highest income from these securities, which, as a rule, is exempt from taxes. That is why the portfolio of government securities is the most common type of portfolio and, in particular, formed on some securities. For example, considering government short-term bonds (GKO) as an example, we note that by buying short-term bonds issued by the Ministry of Finance of the Russian Federation, the investor thereby lends to the government, which will pay for this bond at the end of the term with payment in the form of a discount difference. In fact, this does not cause a budget deficit, since the wealth of the nation is invested in these bonds.

Until recently, GKOs were considered among the safest, since it was assumed that the state, in principle, could not go bankrupt. The relatively high yield of GKOs and their apparent high reliability encouraged investors to buy government-issued securities. Their short-term nature and the low risk appetite that persisted until the financial crisis that erupted in August 1998 made these instruments among the most low-risk and really should have shown low volatility in returns.

A portfolio consisting of government securities. This type of portfolio is formed from government and municipal securities and liabilities. Investments in these market instruments provide the portfolio holder with income derived from the difference in the purchase price at a discount and the redemption price and at interest rates. Equally important is the fact that both central and local authorities provide tax incentives.

A portfolio consisting of securities from various industries. The investment orientation of investments in the regional context leads to the creation of portfolios formed from securities of various parties; securities of issuers located in the same region; various foreign securities.

A portfolio of this type is formed on the basis of securities issued by enterprises of various industries, technologically related, or any one industry.

Depending on the investment goals, portfolios include various securities that correspond to the goal. For example, convertible portfolios consists of convertible and preferred shares and bonds that can be exchanged for a set number of ordinary shares at a fixed price at a specific point in time when the exchange can be made. With an active market (“bull market”), this provides an opportunity to receive additional income. This type of portfolio includes a portfolio of medium- and long-term investments with fixed income.

Can be distinguished portfolios of securities, selected depending on the regional affiliation of issuers, securities of which they are included. This type of portfolio includes: portfolios of securities of certain countries, regional portfolios, portfolios of foreign securities.

If possible, to change the initial total volume of the portfolio, replenished, withdrawable and permanent portfolios are allocated.

Refillable portfolio allows you to increase the monetary value of the portfolio relative to the originally invested funds.

For withdrawn portfolio the possibility of withdrawing part of the funds originally invested in the portfolio is allowed.

IN permanent portfolio the initially invested amount of funds is maintained throughout the life of the portfolio.

There are many types of portfolios, and each specific investor adheres to his own investment strategy, taking into account the state of the securities market and revising the composition of the portfolio. Each portfolio type has its own specific management methods.

When investing, it is necessary to develop a specific policy for your actions and determine:

The main objectives of investment (strategic or portfolio nature);

· composition of the investment portfolio, acceptable types of securities;

· paper quality, portfolio diversification, etc.

Under investment portfolio refers to the totality of securities owned by an investor. Typically, securities traded on the market are valued by the Risk/Reward ratio, which is desirable to improve in the course of management. This ratio needs to be assessed and controlled for different sectors of the stock market.

The portfolio is a specific set of corporate stocks, bonds with varying degrees of security and risk. The portfolio usually includes government-guaranteed interest-bearing securities, i.e. with minimal risk of loss on principal and current receipts.

The main task of portfolio investment is to provide aggregates of securities with such investment characteristics in terms of profitability and risk that are usually unattainable for a single security. In the process of portfolio formation, a new investment quality with specified characteristics is achieved. Thus, a portfolio of securities is the tool with which the investor provides the required return at an acceptable risk for him. The ratio of these factors and allows you to determine the type of portfolio of securities.

Portfolio type is an investment characteristic based on the ratio of income and risk in general for the entire set of securities included in the portfolio. Another important feature in classifying a portfolio type is how and from what source the income will be received: due to an increase in the market value or due to current payments - dividends and interest (see Fig. 5.6).

Rice. 5.6. Main types of securities portfolios

Any portfolio is a heterogeneous set of securities, and even in the riskiest portfolios (such as a portfolio of growth or aggressive growth) there are securities that have relative stability.

Aggressive growth portfolio aimed at maximizing capital gains. This type of portfolio includes stocks of young, rapidly growing companies. Investments in this type of portfolio are quite risky, but at the same time they can bring the highest income due to the growth in market value. Investors who stick to this type of investment try to wait until the share price of young enterprises rises, the companies themselves become quite famous, and then sell them. The proceeds from the sale of these shares are invested in the securities of new young companies.

Growth Portfolio is formed from the shares of companies whose market value is growing. The purpose of this type of portfolio is to increase the capital value of the portfolio along with the receipt of dividends. However, dividend payments are usually a small part of the returns that investors expect to receive. The rate of growth in the market value of a set of stocks included in the portfolio should usually outpace the growth rate of other stocks on the market.

Conservative Growth Portfolio is the least risky among portfolios focused on generating income by increasing the market value of shares. It consists mainly of shares of large, well-known companies that have, although not high, but steady growth in market value. The composition of the portfolio remains stable over a long period of time. In general, the portfolio is not profitable and is aimed at capital preservation.

Medium growth portfolio is a combination of investment properties of portfolios of growth and conservative growth. This type of portfolio includes, along with reliable securities purchased for a long period, risky stock instruments, the composition of which is periodically updated. This ensures an average capital gain and a moderate degree of investment risk. Reliability is provided by securities with a steady but moderate growth, and profitability is provided by rapidly growing securities. This type of portfolio is most common among investors who are not prone to high risk, but who hope to receive a significant income from holding a portfolio.

Income Portfolio. This type of portfolio is focused on obtaining high current income by receiving interest and dividend payments. The income portfolio is made up primarily of income shares with moderate appreciation and high dividends, bonds and other securities with high yields on coupons and similar payments. The income portfolio mainly includes relatively reliable stocks and fairly risky corporate bonds.

Portfolio of regular income is formed from highly reliable securities and brings an average income with a minimum level of risk. A feature of this type of portfolio is that the purpose of its creation is to obtain an appropriate level of income, the value of which would correspond to the minimum degree of risk acceptable to a conservative investor. Therefore, the objects of portfolio investment are highly reliable stock market instruments with a high ratio of steadily paid interest and market value.

Profit portfolio consists of high-yield corporate bonds, securities that bring high returns with an average level of risk.

Portfolio of growth and income. The formation of this type of portfolio is carried out in order to avoid possible losses in the stock market, both from a fall in the market value, and from low dividend or interest payments. One part of the financial assets included in this portfolio brings the owner an increase in capital value, and the other part brings income. The loss of one part can be compensated by the increase of another.

Dual purpose portfolio. This portfolio includes securities that bring its owner a high income with an increase in invested capital. In this case, we are talking about securities of dual-purpose investment funds. They issue their own shares of two types, the first bring high income, the second - capital gains. The investment characteristics of the portfolio are determined by the significant content of these securities in the portfolio.

Balanced portfolio involves balancing not only income, but also the risk that accompanies transactions with securities, and therefore, in a certain proportion, it consists of securities with a rapidly growing market value and high-yield securities. High-risk securities may also be included in the portfolio. As a rule, this portfolio includes ordinary and preferred shares, as well as bonds. Depending on market conditions, most of the funds are invested in certain stock instruments included in this portfolio.

If we consider the types of portfolios depending on the degree of risk that the investor accepts, then it is necessary to consider the classification of investors, according to which they were divided into conservative, moderately conservative, aggressive and irrational. Each type of investor will correspond to such types of securities portfolios: as highly reliable, but low-yield; diversified; risky, but highly profitable, and unsystematic (see table. 5.1)

Table. 5.1. The main types of investors and their types

Type of investor	Purpose of investment	Degree of risk	Type of security	Portfolio type
Conservative	Inflation Protection	Low	Government securities, blue chip stocks and bonds	Highly secure but low income - usually conservative growth or regular income
Moderately aggressive	Long-term investment of capital and its increase	Medium	A small share of government securities, a large share of securities of large and medium-sized, but reliable issuers with a long market history	Diversified. It is usually a medium-growth, balanced, income portfolio
Aggressive	Possibility of rapid growth of invested funds	high	A high proportion of high-yielding securities of small issuers, venture capital companies, etc.	Risky, but highly profitable. It corresponds to portfolios of aggressive growth, growth, income securities
Irrational	No clear goals or they are extremely adventurous	Low	Randomly selected or very risky securities	Unsystematic or aggressive growth

When classifying portfolios of securities, those qualities that acquire a set of securities placed in this portfolio can also act as structure-forming features. With all their diversity, the following can be distinguished from them: liquidity, tax exemption, industry and regional (country) affiliation.

Under portfolio liquidity, understand the ability to quickly turn a portfolio into cash without losing its value. This problem is best solved money market portfolios. This type of portfolio aims at total capital preservation. The composition of such a portfolio includes mainly cash or quickly realizable assets, i.e. typically such a portfolio is either a conservative growth portfolio or a regular income portfolio. A significant share in such portfolios is occupied by cash on short-term deposits and on current accounts. They form a reserve of free cash, which may be required to solve unexpected investment problems.

The amount of the cash reserve depends on the interest rate. Therefore, the investor, by investing part of the funds in deposits and settlement accounts, ensures the required stability of the portfolio. Cash also allows you to actively participate in the foreign exchange market. Thus, in addition to saving funds, an increase in invested capital is achieved due to foreign exchange transactions.

have high liquidity and portfolios of short-term funds. They are formed from short-term securities, most often bonds and certificates of deposit.

Portfolio of tax-exempt securities, contains mainly government debt and involves the preservation of capital with a high degree of liquidity. The government securities portfolio is the most common type of portfolio in those countries where income from government securities is not taxed. In Russia, at present, the creation of such portfolios is almost impossible.

Portfolio consisting of government securities. This type of portfolio is formed in cases where it includes only state and municipal securities and liabilities. Investments in these market instruments provide the portfolio holder with income derived from the difference in the purchase price with a discount and the redemption price, as well as coupon payments. In the Russian context, it includes investments in GKOs, OFZs, OBRs, as well as long-term government bonds and Russian Eurobonds.

In many cases, investors' portfolios have a clearly defined country or regional profile, which is explained by the degree of their familiarity with the business of certain regions or foreign countries.

Portfolio consisting of corporate securities. A portfolio of this type is formed on the basis of securities issued by enterprises of various industries.

The portfolio type corresponds to and type of chosen investment strategy: aggressive, aimed at maximizing the use of market opportunities or passive.

With a passive strategy, investors try to evenly distribute investments in bonds between issues of different maturity (the "ladder" method). Using ladder method”The investor buys securities of various maturity with the distribution of their maturity by maturity both within a year and for a longer period. It should be taken into account that a portfolio of securities is a product that is sold and bought on the stock market, and therefore, the question of the costs of its formation and management is very important.

Under portfolio management refers to the use of a combination of different methods and technological capabilities that allow:

2) reach the maximum level of income;

3) ensure the investment orientation of the portfolio.

In other words, the management process is aimed at maintaining the main investment quality of the portfolio and those properties that would correspond to the interests of its holder.

Question about the quantitative composition of the portfolio is solved both using the theory of investment analysis, and from the point of view of practice. According to the theory of investment analysis, simple diversification by terms is no worse than diversification by industries, enterprises, etc. In addition, an increase in the number of different assets, i.e. types of securities in the portfolio gives a significant reduction in portfolio risk only if the portfolio contains from 10 to 15 different securities. A further increase in the composition of the portfolio is inappropriate, as there is an effect of excessive diversification caused by the inability to predict the behavior of each of the securities and which should be avoided. Excessive diversification can lead to such negative results as:

Impossibility of high-quality portfolio management;

purchase of insufficiently reliable, profitable, liquid securities;

· growth of costs associated with the search for securities (expenses for preliminary analysis, etc.);

· high costs for the purchase of small batches of securities, etc.

When managing a portfolio, it is necessary to try to make sure that the securities included in it are not closely positively correlated with each other, i.e. at the same time they would give income (show growth) or at the same time not give it (fall in price). With a close positive correlation of the securities included in the portfolio, the diversification effect is significantly reduced, if not completely eliminated.

The costs of managing an overly diversified portfolio will not produce the desired result, since the portfolio's return is unlikely to increase at a faster rate than the costs of overdiversification.

09Apr

What is an investment portfolio

Like all our articles on investment topics, let's start with one well-known axiom of successful businessmen:

Money should make money

It is in order to increase your income, even being in the same position and receiving only indexation to the salary, that you can collect a fortune by investing.

With the theoretical base in the context of "Why is this needed at all" sorted out.

Now let's move on to investment portfolios. This concept can have two meanings: broad and narrow. Let's start with the narrower one.

Investment portfolio - a set of securities in which an investor invests in order to make a profit. These can be stocks, bonds, options, futures, trading contracts, exchange-traded financial instruments, etc. They have one thing in common - these are securities, investing in which with a certain degree of probability will bring profit.

The narrow sense of this definition is more suitable for professional investors, large players. One of the main investors in Europe are banks and. Consider, using their example, the specifics of portfolio investments and their difference from direct ones.

Portfolio investments always perform one specific task: to bring profit to their owner. Moreover, they bring profit simply by being in the portfolio. To fully understand the meaning of this, consider a little theory about direct investment.

Direct investments – investing in company shares to obtain a significant / main share in the board of directors. That is, direct investment is the purchase of 51% of the shares of a company in order to completely subordinate it to itself.

Again, let's take the example of banks. They buy shares in insurance companies and force them to act in their own interests. They insure deposits, people, their health, loved ones and other transactions in order to maximize income. But at the same time, such investments pay off on the condition that the company whose shares were bought acts in the interests of a larger “brother”.

And thanks to this, you can catch the difference. Direct investments are aimed at "subjugation" of the company, by buying the lion's share of shares and subsequent participation in management, while portfolio investments are aimed at generating income.

An investment portfolio in the broad sense is a somewhat more mundane concept than its narrow sense. And it is pointless to consider it, because a lot of people know about investments in a bank, in real estate, or simply about extradition to a friend. In this article, we will focus on portfolio investment in securities.

Advantages and disadvantages of portfolio investment

Let's start with the most important question: the advantages and disadvantages of portfolio investment. Let's start with the positive.

Advantages

Liquidity. The first and most important advantage of portfolio investment in securities is the liquidity of investments. In most cases, investors invest their money in highly liquid or medium liquid securities, due to which, if necessary, they can easily get rid of them without a significant loss in value (and often with a profit).

It is precisely because you can sell all your securities in one or two hours without losing value that this principle comes first.

But this does not apply to all securities. Despite the fact that they circulate on the stock exchange every second, demand for some securities can only be in 2-3 days, or even more. But this category includes little-known companies that no one knows. There is very low confidence in them, their securities are bought with great caution, but at the same time, investments are often justified.

openness. fairly open to the general public. This applies to both pricing mechanisms and trade volumes. There is no need to independently study the statistical data in order to determine at what cost one or another paper will need to be sold (unlike the real estate market, which is beloved in Russia). All this is in the public domain for any person - just go to the website of the Moscow Exchange.

It is openness that allows even the most ignorant person to see several factors: price dynamics from period to period, the volume of investments in a particular security, as well as the spread - the difference between the purchase and sale prices.

This data is always made public, so everyone can evaluate the effectiveness of investments. The same cannot be said for other types of investments such as real estate, business, investment funds or bank deposits. The pricing mechanisms there are more nebulous, with prices fluctuating based on strange factors.

Yield. Securities can be immediately attributed to highly profitable financial instruments. Moreover, shares, as one of the most profitable types of securities, can bring money in two cases at once: upon payment and upon an increase in the value of the paper itself.

And if you look at the distance, they bring their investors huge profits in cases where an unknown company breaks into the market.

Simplicity in management. Securities are also good because you can buy highly reliable shares and simply forget about them for a while. Dividends will be credited to your bank account, without your direct participation.

However, this is a double-edged sword. On the one hand, you have a fairly good one, but on the other hand, with proper management, profitability will increase significantly.

In general, securities have good advantages that make them a fairly profitable investment in the hands of professionals, and moderately profitable in the hands of novice investors.

But in addition to the advantages, portfolio investment in securities has a number of disadvantages.

Flaws

Riskiness. The main rule of finance is that the higher the risks, the higher the income. And if securities are a highly profitable asset, then the risks there will be correspondingly high.

Knowledge requirements. Climbing into the securities market without basic knowledge is akin to suicide. And this is not because there are only sharks on the RZB who are ready to hit the jackpot with a beginner. This stereotype. Just without basic knowledge, even with enough luck, you will very quickly lower your entire investment account without increasing your capital.

Investing in RZB can be compared to poker. Even the luckiest player who does not know the theory, only the basic rules of the game, will have a moment when he will simply be crushed by experience. You cannot always be lucky, so without a theoretical base there is nothing to do there. Especially if you don't have crazy luck.

Analysis. This is the biggest problem. Many people's inability to analyze situations can simply ruin their investment account. In order to invest competently, you do not need to have a huge amount of knowledge and special skills. It is enough to correctly build cause-and-effect relationships.

But at the same time, most investors forget about it. A competent analysis will allow you to identify a negative trend a few days before it starts, minimize risks and get the maximum profit even when the market is flying down.

Let's move on to the types of investment portfolios. This is very important information, the knowledge of which will help you form your own investment principles. First, let's start with the most common and popular classification.

conservative portfolio. In the middle of the 20th century, conservatism was the most important principle of investing. It was better to receive less money than to lose it completely.

A conservative investment portfolio is built on the principles of high liquidity and lowest risk. Therefore, for the most part, there will be bonds, financial instruments, and a few percent of stocks.

Suitable for beginners due to small requirements for knowledge and skills. Such investments allow you to gain experience and get the first income that can be directed to something more interesting and profitable.

Aggressive portfolio. It contains high-yielding securities. And as you already understood, the higher the profit, the greater the risk. Therefore, it will be dominated by shares, less often by financial instruments, and a very small part will be bonds.

Suitable for experienced players who are not afraid to take risks, who are able to correctly assess the prospects for the growth of the enterprise, profitability and, in general, can predict the behavior of the market. Not recommended for beginners. Average investment funds love this style.

Combined, mixed or moderate. An investment portfolio in which the conditions of reliability and profitability are equally observed. It cannot be said that this is a happy medium because some stocks will be overvalued by the market, even if the companies are highly reliable, and some fairly profitable stocks will have minimal risk.

The formation of an investment portfolio is the case when it is better to choose extremes than to combine styles.

According to the degree of predominance of securities, it is possible to distinguish - diversified(a portfolio with approximately equal shares of different securities, without a strong predominance of one) and with a predominance of some securities.

The first is more balanced due to the fact that many different investments compensate each other in case of drawdowns. The predominance of one security forces the investor to “bet” on it, and take the rest only for insurance.

Also, according to the method of generating income, you can distinguish:

• growth portfolio. Oriented towards the purchase of shares, the value of which will grow;
• income portfolio. Focuses on the purchase of securities that will bring income (from redemption, dividends, etc.);
• Short term portfolio. Focuses on the purchase of highly liquid shares for their subsequent resale;
• Long term portfolio. Purchase of shares (regardless of liquidity) to obtain a stable income;
• regional portfolio. Purchase of securities of one specific region. Allows you to focus on a narrower market segment;
• Industry portfolio. Buying securities in one industry. The same as in the previous case - using your knowledge to narrow the investment field;

Knowledge of the classification allows you to more fully and competently imagine how to follow the path of a competent financier, what to invest in and in what cases. And now about the principles of investing.

Principles of portfolio investment

Now let's talk about what principles underlie the formation of an investment portfolio.

Target orientation. This is the most important principle of investing in general and portfolio formation in particular. The main thing to decide is why you are investing in securities at all.

There may be several options: saving money (inflation indexing), maximizing profits, gaining initial investment experience, acquiring real-time securities market analysis skills, generating completely passive income, etc. You can continue indefinitely.

The main thing to remember is that you need to set a clear goal, following which will be the key to correct and successful investments.

After the formation of the task, it is already necessary to set smaller goals:

• Find highly liquid securities for resale;
• Build a conservative investment portfolio for passive income;
• Buy stocks that will grow in the future to maximize;
• During trading on the exchange, take advantage of leverage to build intraday trading skills.

There may be many goals, but they must be.

Balance of risks and incomes. The balance of risks and returns is the very controversial point in which investors cannot find a compromise. Some people say that just earning income is very important, others believe that it is high profit numbers that make the securities market so attractive.

Everyone must decide for himself, already on the basis of his goals, how exactly he should balance on the verge of risky operations and profit. But do not forget that in some cases, high profit is not associated with high risk. This is rare, but it happens.

Liquidity. Do not forget about the liquidity of your securities. You have to buy and sell over and over again, which is why a high “tradability” will make your assets very attractive.

But there is one interesting opinion - low-liquid assets can be more profitable. This is true, because low liquidity - securities of the 3rd echelon, that is, little-known companies, a kind of dark horses. It is precisely because of the undervaluation of the securities of one or another issuer that such a huge, at first glance, profitability is formed.

Diversification. Distributing risks between several assets is something absolutely every investor cannot do without. And the point here is not that it is necessary to balance between high-yielding securities and reliable ones. It's just that portfolios with a large number of different assets give the investor more freedom of action to change the set of their securities.

If you have one type of stock prevailing over the majority, this means that you will not be able to remove them from your investment portfolio with a 90% probability, even if you see that they are unprofitable. And if there are several papers in equal shares, then parting with one of them will happen less painfully.

What is included in the investment portfolio

The investment portfolio may include the following assets:

• Stock;
• Bonds;
• Futures;
• Options;
• Bank deposits;
• Currency;
• Precious metals;
• real investment.

Shares and bonds- a kind of antagonist in the world of securities. While the former are risky, bring greater profitability and can make a person a millionaire at a distance, the latter are more conservative, not adapted for short-term and medium-term trading and are designed for passive investors.

Investing in stocks implies constant surveillance of the activities of the company, while bonds, on the contrary, require almost no attention. It is not for nothing that shares are used to raise initial capital from most companies, and bonds are preferred by the state for borrowing from the public.

Financial instruments like futures and options are an interesting type of investment in RZB. Speaking very roughly, these are bets on economic events. Using these tools requires certain knowledge and skills, but despite this, the futures market is the most "kind" for beginners.

Bank deposits and deposits. Banks, whatever the current situation in the banking sector, are still the most reliable means of investing small and medium amounts.

For those who want to create a completely passive income for themselves, bank deposits will be an excellent means of covering inflation and creating a small “safety cushion” if another crisis begins and the securities of selected issuers will fly sharply into the pipe.

Currency and precious metals. At the same time, it is advisable to choose a currency based on the current economic situation in the world, soberly assessing the prospects of a particular country.

In the event of a crisis in Europe, you should always look at the dollar, in the event of a crisis in America - at the Euro or the Pound. Plus, cryptocurrencies are now gaining popularity, the leading of which is still bitcoin.

This is a great way to cover inflation, because the trend is that over the past few years, this currency has continued to increase, and in about 15-20 years, its production will completely stop, which can make bitcoins an analogue of gold.

Speaking of precious metals. - one of the most interesting types of investments. You can invest money and you will be given a certificate that you own some amount of precious metal.

Interest will be charged on it, in which case you will be able to withdraw money, and along with an increase in the value of the metal, your account will increase. But an impersonal metal deposit is a way of long-term investments, or a means of saving before a crisis.

Real investment- investments in real estate, business, a share of a startup and other assets that can be touched to some extent. In Russia, the culture of real investments is still not widespread, and for ordinary people, investing in residential real estate is still the most popular option.

This is what an investor's portfolio can consist of. There may not be any specific positions, for example, instruments, real investments, metals and currencies. The main backbone is still made up of securities, mainly bonds, while more conservative investors have the lion's share of deposits in banks.

Step-by-step instructions for building an investment portfolio

Now let's move on from theory to the practical part, namely step-by-step instructions on how to form your investment portfolio.

Step 1. Choosing investment goals

As we said earlier, the first thing to do is choose your target. The question “Why am I investing money” must be approached with all seriousness, based on the information above.

Goals can be divided into two areas:

• Why do I invest;
• How much do I invest?

After answering these two questions, you can move on to the next step.

Step 2. Determining the strategy

After choosing the goals, you will need to decide which strategy to use. An aggressive strategy allows you to earn money by taking risks, a conservative one allows you to survive inflation and have a truly passive income, and a mixed strategy balances on the edge (does nothing).

At the same time, one should not think that adherents of aggressive strategies mindlessly buy stocks that can go uphill. They take the same into account risks, expected profit and are engaged in forecasting the behavior of the price of a particular asset.

In fact, what distinguishes them from conservatives is the object of investment: aggressive investors will prefer to invest shares in an unknown company that can shoot, while conservatives will prefer fame and reliability.

Step 3. Search for a broker

Then you should find yourself a good broker. It is not worth talking about stock brokers for a long time. Just analyze the activities of several companies, find out if there are banks in your area that provide brokerage services, if not, contact specialized companies.

Step 4. Selection of investment objects

Now the hardest part. It's time to decide on the object of investment. In the first 4-6 months it is better to be conservative. Study the market, ask the price, gain experience. It is advisable to invest in the most reliable stocks (blue chips), about 1-5% in the state. bonds (although, frankly, the yield on them in 2017 will be lower than on bank deposits),

Some statistics: 5 investors out of 100 lose their investment account to zero, and then within a few years. If you do not engage in mindless game / trading on the stock exchange, then it will be very difficult to lose your money. And even more than half of the investors make a profit.

Therefore, do not be afraid to invest in securities. Just for starters, in the first year of investment activity, we strongly recommend that you keep about 50% of your funds in the bank, directing profits to increase investment volumes.

Step 5. Analysis of the created portfolio

Then comes the most interesting time. You will need to monitor the performance of your portfolio from time to time. If you are a conservative, you will just need to periodically monitor the course and at least once a week watch the news of those companies in which you have invested.

But if you choose an aggressive style, then you will have to watch the market much more often. It is necessary not only to read the news on the company's website, but also to look at the quotes every day, constantly look for the "underdog" company - a greatly underestimated newcomer to the market, look at those who are overestimated. This is a complex analytical job that will bring a lot of income if done right.

Step 6. Portfolio Optimization

Optimization follows from the analysis. If the issuing company in which you have invested shows poor results, falls, the financial result is consistently negative, then you should part with these securities. Or hold them, leaving the belief that they will rise again, pushing off the crisis bottom.

The approach to portfolio optimization is individual for everyone. Conservatives rarely change their choice, aggressive players part with papers once a week or a month, and average players try to sell when the price is up and buy when it draws heavily.

Step 7. Making a profit and using it

The last and most delicious step. Making a profit is what all people invest their own money for. If this is not your passive source of income, then you should use profits to expand investment volumes.

In what proportion to let the profit back into business is up to you. Experienced players recommend doing this at a rate of 70/30.

Little secret: many people who are engaged in portfolio investment hit the real jackpot in moments of crisis. The moment when the market is oversaturated, the financial bubble bursts, most companies are a real paradise for those who can assess the real prospects of companies without panic. Just look at the movie "The Big Short", which tells how several financiers saw the economic bubble in the real estate market in America and took advantage of the situation.

But we have not mentioned one very important step here. Even before you start setting yourself investment goals, you need to study the necessary theory. No need to carefully study the principles of pricing.

A small digression about paid online training for playing the stock exchange, investing and other similar things. Often this is complete nonsense and they try to sell you the knowledge that you can get for free. You can learn how to invest: on forums, reading specialized literature (there is free, but it is advisable to purchase a paper version) and reading blogs of successful investors. But, of course, occasionally there are very good courses.

This is where Brian Tracy's well-articulated method comes in handy: Find out what successful people in your field do and copy after them. Collect the thoughts and skills of successful investors, and you can make a profit like them.

Financial intermediaries

We cannot but touch upon the topic of financial intermediaries. To do this, we turn to the west. There the culture of financial investments is much better developed than in Russia. Each Western and American family owns shares of 2-3 companies and is ready to invest a small amount in a new and promising business.

But in addition to self-investment, there are many investment funds in which people transfer their money to receive income. Funds carry out their activities at the expense of clients' funds, guaranteeing them a fixed income. If they show a large profit, they take their commission.

But in Russia the situation is somewhat different. We do not have a culture of independent investment as such. At the same time, financial intermediaries in the field of investment are still in their infancy.

Another negative point is the fake profitability figures. Investment funds on their websites show a yield for the year - 60%. It is clear that this result is nothing more than drawn numbers, because it is simply impossible to show such indicators for more than one period, because investment funds are primarily interested in stable income generation, and not big numbers.

But two financial intermediaries are worth paying attention to.

Mutual funds

Or as they are abbreviated as mutual funds. The principle of their work is as follows: you buy an investment share for a predetermined price, and according to the purchased “share”, at the end of the period (most often a year) you receive your funds back + the interest received.

At first glance, everything is very attractive. You just invest money, and professionals in their field work and keep a commission for themselves if they make a big profit. In reality, things are not so rosy in Russia. Drawn figures, big risks, periodic closure of banks. and, accordingly, their investment funds. All this together does not give a very positive result.

Nevertheless, at the end of 2016, the Central Bank took seriously the investment direction and the introduction of an investment culture into the Russian economy. That is why we should expect more serious operations to control the activities of mutual funds.

This means that approximately in 2018, investment funds will have to fully whitewash their activities, show real profitability figures and make a profit 1.5-2 times higher than a bank deposit.

Broker banks

Here is another principle of financial intermediation. Broker banks provide an opportunity and tools for trading in the securities market. Moreover, they carry out all operations on your instructions. But there is one trick - you can always talk with bank employees about investment objects, volumes and strategies for investing your funds.

Employees of any brokerage company are well aware of what is happening in the market, and therefore they are happy to advise their client. By talking to them, you can get practical advice on what is right for investment right now, what to get rid of, and what is overpriced.

The broker is interested in your profit, because he receives a commission from your transactions. That is why its employees will help you in every possible way.

Analysis of the effectiveness of the investment portfolio

The effectiveness of an investment portfolio is a somewhat vague concept. For some, it is the preservation of funds, for others - a constant increase in income. Still others generally prefer to create passive income for 5-10 years. But despite this, the analysis of the effectiveness of the investment portfolio has a common point.

Investors are primarily interested in money. That is income. That is why the main principle of the investment portfolio is profitability. It shouldn't make a loss. Each time you should receive a net profit from your investments. This means that you need to cover inflation and the commission of a brokerage company that allows you to carry out your activities on the exchange.

The easiest and most effective way to analyze the effectiveness of an investment portfolio is to look at the distance to see if the return on investment is increasing. If it increases, it means that you work better than 80% of investors. If the profit plus or minus is stable, then you receive your income without developing as an investor. This is good for those who create passive income with a minimum investment of time and effort.

But if the profit decreases and the investment account shows losses, then steps should be taken to optimize the investment portfolio.

Portfolio Optimization

Creating an optimal investment portfolio for the first time is unlikely to succeed. The market is volatile, and what yesterday seemed profitable and stable, now only brings losses. That is why you need to optimize your investment portfolio at least once a month.

You analyze the behavior of your securities for several weeks, and if they show consistently poor financial results, you will need to do a few things:

• Find the reason;
• Make a prediction;
• Act according to this forecast.

Everything is very simple here.

If stocks show a negative result, then the reasons may be as follows:

• Negative economic situation in the country;
• The fall of the industry;
• Internal problems of the company;
• Change of leadership positions;
• Undervaluation of shares;
• Getting rid of overestimation.

Consider the reasons for which you need to change securities:

• The fall of the industry;
• Getting rid of revaluation;
• Internal problems of the company;
• negative situation in the country.

They are positioned this way because the downfall of the industry is the main reason to get rid of the company's securities. If the industry becomes unprofitable, it means that it will only get worse.

Example: oil companies in 2014-2016. During this period, these companies suffered huge losses due to the fall in oil, and in general, their papers should have gone down the drain, if not for government support, which covered all their losses. But there were significant drawdowns, especially against the backdrop of an increasing dollar.

When the market "opens its eyes" and realizes that it has overestimated a particular company, then a massive sale of securities begins. After it, there will be no sharp take-off, or even at least a gradual “climb”. That is why, as soon as you see that the market has "seen the light", feel free to sell securities.

The internal problems of the company are a reason to get rid of securities in an aggressive game. To understand why, it is enough to turn to the well-known Apple. As soon as the media learned that Steve Jobs was ill, the shares of the Apple Company began to rapidly lose value. And if not for the colossal popularity of the brand and the corresponding revaluation, they would not have recovered so far.

The negative situation in the country's economy is the last and not the most unambiguous problem. On the one hand, loss-making securities should be disposed of, and on the other hand, there is a crisis in the country as a whole, so it will be the same in many industries and companies.

Here are the reasons for portfolio optimization. The optimization process itself is simple - sell securities as soon as you feel that you have squeezed the maximum out of them.

The main mistakes of beginners

Now let's talk about the two main mistakes of novice investors /

Mistake 1. Lack of purpose.

This is the most serious mistake that we talked about at the beginning of the article. Investing without a goal is simply losing your funds. If you do not understand why you want to invest your finances, you have nothing to do in the securities market.

Mistake 2. Deviation from the strategy.

Each investor forms his own investment strategy for himself. You can take someone else's, but over time, you still adapt it to your needs. You should always stick to your strategy, and there is only one case for deviation: it is unprofitable in the middle / long distance.

In order to understand whether you are making the right decisions, you will need at least a month. But if you change the principles and approaches to choosing securities every week, you can forget about profit.

Conclusion

Portfolio investment is a type of financial investment that is aimed primarily at making a profit. The object of portfolio investments can be securities, bank deposits, currencies, metals and real types of investments, which include real estate, shares in business, construction, start-ups, etc.

The main principle of portfolio investment is risk diversification. This means that you must divide your funds into several directions or securities. This is done in order to minimize losses and be able to safely get rid of this or that asset.

To start collecting an investment portfolio, you need to set a goal, find a broker and purchase the necessary securities. After that, you analyze the profitability of your securities, change them in case of negative indicators and enjoy the profit.

Remember that investing, even in the absence of special knowledge, most often brings profit.

portfolio income – English Portfolio Income, is a type of income that comes from one or more investments. The term "portfolio" usually refers to a set of various investment vehicles owned by a particular investor. An investment portfolio, for example, may include stocks, bonds, certificates of deposit, real estate, derivatives. The income received from investments may be in the form of interest (like bonds and certificates of deposit), dividends (like stocks) or other forms, provided that it is passive income from investment activities.

When choosing from a variety of investment vehicles, investors usually consider two factors: the return on investment and the level of risk. Stocks are usually considered quite risky investments, but they can generate income both from growth in value and from dividends that are paid to shareholders as a result of profit distribution. Bonds and certificates of deposit, in turn, generate income in the form of interest. Other types of investments can also generate income, the form of which depends on their nature.

Investors often invest their funds in several types of investments at the same time, which is called diversification. In this case, risky investments with a high rate of return and less risky investments with a low or moderate rate of return are combined. Such a set of many investments is called a portfolio, and the total income that it brings is called portfolio income.

Portfolio income is often recognized as passive income, since in most cases the investor does not make a targeted effort to receive it. That is, after making the initial investment, they generate income without the active participation of the investor. Portfolio income is distinct from active income, which is income derived from actively participating in or making direct expenditures of energy or time.

In order to provide themselves with additional income when they retire, many seek to do this through an investment portfolio. That is, these individuals hope to live off the interest, dividends, and other returns generated by their investments. As a rule, investment advisors recommend spending only portfolio income, but not touching the principal (the principal amount of the investment).

This means that if a certain person has invested his money, he should not touch it afterwards, but only spend the money that this investment brings. The disadvantage of portfolio income is that significant investments are required to form it in a significant amount, that is, the investor must accumulate a large amount, which takes a lot of time. At the same time, the advantage of portfolio income is that the investor will not be left completely without money, since in addition to current income, he always has a principal at his disposal.