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Investment Portfolio: A Systematic Approach Of Making Profits!

“Never depend on a single income. Make investments to create a second source.” – Warren Buffett.

The above-written statement is so impactful that many people are either investing in different types of securities or learning about them. Perhaps, you are also one of these people. Right? And if we guessed it correctly, you belong to the second category.

The idea of making more money is always fascinating. However, the factor name “risk involved” always becomes a barrier. Let’s be honest! You want to earn more, but without bearing any kind of risk. Right? sadly, that is not practically possible because investment and risk go hand in hand.

However, where there is a will, there is a way! That means, if you can’t eliminate the risk, you can at least minimize it. Nonetheless, before we go ahead with the question- “How?” we must teach you some basics. So, let’s get started!

What is an Investment Portfolio?

You might agree with us that people who want to make extra money make investments. But the question is what type of investment? Well, some people invest in shares, while others in bonds or mutual funds. It depends upon the capability of how much risk a person can bear.

However, in addition to these, some people speculate in a mix of all. In simple terms, an investment portfolio is like a fruit basket containing different types of fruits, i.e., securities.

Nonetheless, this portfolio is always based on 401(k)s, IRAs, and financial advisory firms’ advice. Having said that, Are you ready to learn how you can create one?

Get! Set! Go!

You are able to create and manage your portfolio easily on Finscreener.

Understand your Objective

First of all, you must decide the objective of your investment. Every person has different needs and taking those needs into account, they determine the intent. Yet there are some of the general objectives that become a reason to speculate, and these are:

  • To appreciate the value of capital invested.
  • To preserve the capital invested.
  • To generate revenue.
  • To minimize the tax levied.
  • To increase the liquidity capacity.
  • To create a backup after retirement.

According to the objective of your speculation, you’ll create your portfolio. Besides that, a clear objective will also help you in creating a strategy and provide expected results.

Determine the Risk Factor

The next step is to determine the risk factor. As mentioned earlier, you can not eliminate the risk entirely. But, you can reduce the risk. And for that, you need to observe the changing market scenarios very carefully. As it is just a beginning for you, it won’t be easy. These markets rarely stay constant; therefore, you need to understand which type of security will be helpful in the long term.

Moreover, you need to consider the time frame of the speculation and decide the risk factor accordingly. If you believe that you can bear the low returns initially, it is better to create a diversified portfolio.

Select the Assets and Securities

After determining the risk that you can bear, you need to start with the investment. But the question is- where? And the answer to this question is selecting the assets and securities based on your risk tolerance capability.

As you are a beginner, it is better to follow the IRAs guidelines or take financial advisors’ help. That can help you select the best securities as per your objectives and risk tolerance. In fact, you don’t need to create a portfolio based on the available assets and securities. To make the portfolio safer and more powerful, you can add insurance to it.

Yes! You read it correctly. You need not stay restricted to stocks, mutual funds, bonds, currencies, or blue chips. Moreover, insurance helps in protecting your assets from uncertainties and enhances the value of the portfolio.

Now, the question is, what insurance policy should you take? Well, rather than searching about various policies online, it is better to stay on the safer side.

Hence, as per the financial advisors at, it is better to seek guidance from the experts to select the best investment grade insurance. This way, you’ll also get peace of mind.

Don’t Forget to Take advantage of the Tax Regime.

Last but not least, you must understand that generally, investments have tax benefits. Here you get the benefit of 401(k)s in particular. As per this, you can invest in several mutual funds, and whatever amount you use for it will get deducted from your taxable income. In simple terms, you’ll probably pay less tax.

Wrapping up!

Putting the risk factor aside to generate more revenue is never easy, especially for the newcomer. However, if you take your advisor’s help and observe the market carefully with the help of Financegab, you’ll be able to achieve a good ROI.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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