Portfolio construction course

Portfolio construction

“Portfolio construction" is not simply a matter of selecting stocks and bonds and determining their allocation. It involves understanding how all of the different components work together and how elements like risk and diversification play a role. See the curriculum below to master the fundamentals of portfolio construction. 

In this step-by-step course, you will learn:

  1. The benefits of having an established investment process and how to get started
  2. How to rethink risk and its impact on investment portfolios
  3. The importance of seeking diversification

Tip: Maximize understanding of the material by navigating the modules in order.

Portfolio Construction

An investment portfolio is a selection of financial assets that may include, among others, cash, bonds, shares, commodities and derivatives – both in local or foreign currency. Each having different levels of risk, return, liquidity, and cost. Building a portfolio is to decide within the universe of options the combination that may satisfy the investors’ goals.

That we know that maximizing profit stands at the core purpose of any investment.

This goal must also adapt to other investor requirements. This set of requirements and preferences is what we understand as a clients’ profile.

So, portfolio construction must start by outlining this profile through answering questions such as when and how frequently does our client require available liquidity? This liquidity requirement will determine our investor’s preference for short or long term assets and the share of liquid assets within its portfolio.

A second element is risk tolerance. The larger the potential return, the higher is the risk, which is not necessarily a negative feature but one that should be incorporated intentionally in an acceptable degree and bearing in mind our client’s profile.

Finally, portfolios with standard structures may have lower costs as far as commissions are concerned. At the same time, the impact of taxes and net returns should be considered early on.

Portfolio construction course

With so many investment options at hand, how can an investor know how to build the best portfolio? Considerations such as the investor’s investment needs, preferences, and risk profile are among a few of the top factors to keep in mind.

Start the course by exploring how to create an established investment process

Finish the course by understanding the impact of risk and diversification on investment portfolios

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