examples of investment portfolios
Consider four examples of investment strategies, aimed at the achievement of objectives such as capital gains, income generation and reliability.
The portfolio of the aggressive growth of capital.
In this portfolio should include «growth stocks», i.e. shares, which bring a small dividend or do not bring it at all, however, as the development of the company-the Issuer and the emergence on the market of new promising products can rapidly grow in the price. Along with the «share of growth» for such a portfolio fit well with a low rating and sold at a huge discount from the face value of the bond, the purely discount bonds, ownership of housing and commercial real estate. When managing a portfolio allowed the borrowings under the brokerage rate of demand for financing investments with a higher expected rate of return and the opening of other financed at the expense of the credit of positions. The risk of the increased sharply, over time, however, it can be justified by high-income groups. Portfolio aggressive growth corresponds to the policy of the simple term insurance. Consider the possibility of investing in mutual funds, preferring portfolios of aggressive growth, makes sense only in that case, if you diversify assets.
The portfolio of conservative growth.
In this portfolio should include stocks of well-known companies operating in sectors with good prospects of development. Studies have shown that fluctuations in the yield of the shares may be largely eliminated through diversification (especially international) a stock portfolio. For this portfolio are also convertible preferred shares and convertible bonds. Depending on the stability of cash flows and expected returns allowed the inclusion in the portfolio of investments financed with the help of a small leverage, or «leverage» (i.e. borrowed funds). The investor, striving to achieve a conservative growth of the invested capital, you should choose the mutual funds, the priority aim of which is capital growth. Suitable as «closed» mutual funds.
Portfolio aggressive income.
This category of investors is recommended to pay attention the share of Mature firms that consistently pay significant dividends, corporate bonds or preferred shares (depending on the degree of the scale of income tax, on which stands the investor), non-residential real estate, rental housing Fund and mortgage loans. Investments, financed with the help of loans, lead to an increase in uncertainty of current income, they should be avoided, except for the case when it comes to their own home of the investor. As one of the sources of income may be considered the sale of call options on ordinary shares owned by the investor.
The portfolio of conservative income.
Its main goal is to keep the value of the investment, so the proportion of shares should be small; it is recommended to limit the shares of the companies of communal economy and the shares of industrial companies of the highest investment quality. From a bond issue corporations should choose bonds with a high rating. If the investor has to pay income tax at the higher rate, it is also suitable reliable municipal bonds. Very suitable instruments are and certificates of Deposit. The acquisition of real estate, with the exception of your own home investor, it may be too risky investment. Open positions, financed with the loan, should be avoided.
The portfolio of reliability.
For him, the optimal investment in money market instruments, government guaranteed securities and short-term certificates of Deposit. The use of a loan should be minimal. Investments in residential real estate are quite acceptable, but the mortgage loans should be limited to small amounts. The portfolio may also include annuities.
