Forming a portfolio is like studying science. It takes a great deal of in depth research and knowledge and lots of testing to get the right combination. Every person's portfolio is different depending on a person's risk appetite and financial conditions.
Your portfolio comprises all your assets. That is your mutual funds, stocks, cash, savings, properties, gold, insurance policies and so on. The division of the above listed items and its subsequent graphical representation would give you your portfolio.
Ideally it is recommended that a person should have no more than 5% of his total wealth in cash or in savings. A greater part of the money should be invested in financial instruments which would in turn deliver a higher rate of interest.
Remember that in order to become rich your money should work for you and not the other way around.
Also, listed below is an ideal composition for any portfolio:
Mutual Funds: 10% to be divided amongst various debt and equity schemes.
Property: 45% Perhaps the Most essential part of your portfolio.
Gold: 15% The figure is relatively high because Indian households have a tendency to purchase gold.
Cash: 5% to be kept for immediate and emergency use
Savings: 5% to be kept in banks and Postal saving schemes.
Insurance: 10%. Today more than ever insurance is essential. House insurance, car insurance, life insurance etc
Loads of wealth
-Doodle
