What Is Portfolio?

There is a saying that “Don’t keep all the eggs in a basket”. Suppose you keep many eggs in a basket. If basket falls, all eggs of the basket may be damaged at a time. But if you keep some of them in the different basket, one may be fallen down, rest will remain safe.  

Similarly, for investment, whole of your funds if you invest in a single security, price of the security goes down or becomes more volatile your investment may be lost. This is why you should invest funds into different securities or assets to minimize the risk and maximize the profit. It means risks should be diversified. So portfolio is the management and investment the whole funds into different securities or assets to diversify the risks and gain optimum level of profit.