Investment portfolio: what are the pillars?

Investment portfolio

Investment portfolio: what are the pillars?

And why stocks are worth investing in

Investment portfolio: what are the pillars?

It’s not uncommon to hear, about stocks, that “are only for those who have a very high risk appetite” or that they “are only suitable for those who are ready to lose what they have invested”.

Well, these statements are true and false at the same time. To explain this, it is necessary to take a quick step back, starting with the pillars on which an investor’s portfolio is built.

These are five distinct classes, also known as asset classes, which, combined in different proportions depending on market conditions, allow for diversification and the achievement of investment objectives: cash, bonds, stocks, commodities and real estate.

Diversification is thus the keyword

We will here focus on stocks, and on why they are worth investing in.

If one considers the performance over the past 40 years of the Standard & Poor 500 index, known as the S&P500, it can be noticed that the price trend has tended to increase over the last 40 years.

Prices certainly had some deep downward phases, which however were followed by much more incisive upward movements.

Basically, those who started an accumulation plan 10, 15 or 20 years ago on the S&P 500, at this moment are probably uncorking a bottle of sparkling wine.

Even more positive would be the situation of those who invested in the largest U.S. companies when they entered the stock market.

What are, thus, the best ways to invest your savings and benefit from stock prices over time? For more please read One Million for my Daughter


Pietro Di Lorenzo