How to Build an Investment Portfolio For You

Start with a Goal:

The success of an investment portfolio is defined by whether your financial goals can be achieved. Goals differ from person to person and should be personally evaluated as such. Some people view their investment future in the long-term while others are concerned more with a short-term outcome. Many investors are looking for a mix of both long-term and short-term investing.

Common goals investors consider when planning their investment portfolio can include:

• Securing retirement
• Funding education
• Buying property
• Starting or expanding a family
• Donating to charity
• Leaving an inheritance

The American Association of Individual Investors (AAII) offers a worksheet to help investors organize and prioritize their financial goals. Once your goals for future wealth are established, you will have a much clearer understanding of how you can proceed with choosing investment strategies that will help you reach them.

Know Your Risk Tolerance

When it comes to investing, there are generally three main categories investors fall into – high, moderate, and low. Identifying which group you belong to is crucial when defining your investment portfolio because it allows you to determine how much loss you can withstand based on certain factors.

Your Familiarity With Investing

Those more familiar with investing may have a higher risk tolerance, while someone just starting to develop a financial portfolio may have lower risk tolerance.

It is important to note that as your familiarity grows over time, so may your risk tolerance. One of the most effective ways to improve your knowledge about investing is by collaborating with experts and trading platforms that can help you in your journey.

Your Timeline to Invest

Over time, the stock market experiences fluctuations, and your investments travel with those movements. So, it is important to assess your timeline and determine whether or not you will have time to make up for what might have been lost during a fall in the market.

Your timeline will also largely depend on your goals. Long-term goals allow investors to invest in growth stocks, for example, with higher long-term returns, for more time to invest in things like stocks and bonds, while those who are eyeing short-term investments may consider Certificates of Deposit or money market funds.

Your Circumstances

Your age, employment status, and current financial position are all important considerations when determining your risk tolerance.

Other life-altering events you will want to remember when assessing your risk tolerance include marriage, divorce, children, and expected career changes.

Your Comfort With Taking Risks

Your age, employment status, and current financial position are all important considerations when determining your risk tolerance.

Other life-altering events you will want to remember when assessing your risk tolerance include marriage, divorce, children, and expected career changes.

Researching Your Options

Once you have clearly defined goals about how you would like your money to grow for you, and you've considered your risk tolerance and personal circumstances, it is time to consider the options.

Experts agree that diversifying your investment portfolio is one of the wisest choices regarding your finances. Diversifying means that you choose different types of investments like stocks, bonds, mutual funds, and exchange-traded funds (ETSf) real estate is all part of a well-diversified portfolio based on that asset allocation.

Diversifying your assets is important to lessen the risk of loss by not relying on one type of asset to bear the brunt of your entire portfolio. For example, a mix of assets like individual stocks, ETFs, bonds, and CDs can offer security if one side dips too much.

Determining what asset allocation works best for you is built upon your clearly defined plan based on goals and risk tolerance.

Stay Engaged With Expert Help

Once you have a better understanding of your goals, your risk tolerance, and the options that are out there for you, defining the right portfolio for you can be simple, especially if you have someone with similar circumstances with whom you can follow along and learn as you go.

With trading platforms like Wizest, which will be launched soon, you can connect with expert investors who can help guide you in your investment journey at your own pace. It all starts with a simple simulator to help you get started; from there, you don't have to go at it alone. It is the best of both investing worlds – you remain in complete control of your financial wealth, but at the same time, you have that support system to help develop your knowledge at every step.

Staying engaged in developing the perfect investing portfolio that works best for you builds not only confidence in the investing game but empowerment for your financial future.