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Whether we realize it or not, almost everyone has a financial portfolio. I've got one. You've
got one. Your friends have all got one. So what is it?
A portfolio is just a collection of your financial assets, whatever those assets may be. If you
were an artist, you'd keep your best work in your art portfolio. In the same way, as somebody
who earns money, you keep your assets in your financial portfolio.
Your assets are anything that adds to your net worth — such as mutual funds, stocks,
bonds, or even cash. Yours might not seem that big right now, but they're like trees
— they take time to grow.
Most of us open our first portfolio when we start a retirement account, usually at our
first job. You and your employer may both put money into that account. The money gets
used to buy investments, like mutual funds, which are intended to grow over the years.
How much can they grow? That depends on how aggressively you invest. When we're younger,
most of us will have riskier investments that might swing up and down, but have historically
shown growth over time. We won't be retiring for a while, so we have time to ride out these
ups and downs.
But in a few decades, when we're closer to retirement, we'll want stability and security,
so we'll tend to have more conservative investments. They may not drop as much, but they may not
grow that much, either.
A great portfolio fits your own style and taste. Most investment accounts, including
your retirement account, have tools that can help you pick the funds.
Go online and check out these tools. You've already got the portfolio. Why not make the
most of it?