Meaning & Definition of Portfolio (Concept / What is)

Definition of portfolio

Portfolio is a french term and it is a sort of handbag (or towel) which is used for transporting papers, documents, books, or other. It is an accessory used on a daily basis, even to go to work.

For example: "I forgot my wallet in the car: it will be necessary that I return ', 'Please, give me the portfolio because I have an invoice on the inside,' ' tell him that I bring a project very interesting in the portfolio.»

The portfolio is used to transport documents and other working documents. An accountant can use a portfolio to keep balance sheets and financial statements, from his home to his office, and his office at the premises of customers for which he worked.

The concept of portfolio can also be used in the symbolic sense. Means investment portfolio all financial assets in which a person or a company invests. The portfolio includes therefore all assets (such as stocks, bonds, cash or deposits) involving a capital gain expected performance.

The idea is that the portfolio investments (or investment) include different asset classes: thus, it is possible to reduce the risk inherent in any investment. If an investor has only stock exchange shares in its portfolio and there is a crash in the stock market, it will have lost all his capital. However, if the portfolio includes shares, cash and deposits at the Bank, it will be a backup to withstand the stock market crash and not to lose all his possessions.

Translated for educational purposes.