What is a Portfolio Investment?
- A portfolio investment is the purchase of shares of stock or bonds.
How Do I Remember It?
- Think of portfolio investments as building a “portfolio” of different types of investments. It’s like creating a collection of stocks, bonds, and other assets to manage risk and optimize returns.
Real World Example
- An individual who invests in a mix of stocks, bonds, and mutual funds to diversify their investment portfolio engages in portfolio investment. Similarly, a pension fund that invests in various financial instruments to achieve long-term growth and stability also engages in portfolio investment.
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