Master Your Financial Future: Four Essential Strategies for Building an Investment Portfolio

Whether you’ve just started your journey to financial health or are well on your way to reaching your financial goals, you’ve likely heard about the critical role investing plays in financial health. 

While this is sound advice, you may have lingering questions about how to construct an investment portfolio or whether certain times are more opportune for investing. You might also be curious about whether you should focus on specific types of investments, such as stocks or bonds, or explore real estate and other commodities. 

There isn’t a one-size-fits-all answer. While some strategies can benefit nearly all investors, your investment choices should align with your future financial plans – both short-term and long-term. 

Here, Ryan Giacomarro, Head of the Mid-Atlantic Bank for J.P. Morgan Private Bank, shares four key strategies for building your investment portfolio and how to get started: 

Learn what makes up an investment portfolio 
Begin by familiarizing yourself with what an investment portfolio entails. A portfolio is a collection of investments that often includes an array of asset classes such as equities, or stocks, representing ownership stakes in corporations; fixed income securities including bonds, and tangible commodities like precious metals or agricultural products. Investors often view their investments as a whole through their portfolio to track their progress.  
 
Assess your risk tolerance 
Investment strategies are not universal. If your goal is to minimize risk and preserve your principal investment, consider a conservative portfolio with assets like bonds, which can be less prone to significant losses. Although a conservative portfolio could yield lower returns, it may be suitable if you're nearing retirement and will need your funds soon—or if you simply prefer to minimize risk. 

Conversely, a high-growth portfolio involves investing in higher-risk assets that can yield more substantial gains or losses. While it’s often recommended that younger people invest more aggressively since they have more time to recover from potential losses, it’s more about how soon you hope to achieve your investment goals. 
 
You might opt for a balanced approach, diversifying your investments across multiple asset classes.  

Diversify your portfolio 
Plan to distribute your investments across different types of securities. For example, avoid concentrating all your money in a single stock, as a downturn in that stock could jeopardize your entire portfolio. 

It’s also recommended not to put your money solely in one asset class (for example, just stocks) – instead, it’s generally better to spread your investments across different types of securities with different levels of risk. 
This approach can help protect your money. For instance, you have money invested in several asset classes like bonds, stocks and commodities, and the bond market falls, only part of your investment portfolio will be affected. 

Think long-term, no matter your goals 
Regardless of strategy and allocation, it's generally advisable to maintain a long-term perspective, as this allows for the compounding of returns and the ability to weather short-term market fluctuations. For investors, maintaining a long-term mindset can pave the way for success. Although markets can always have a bad day, week, month or even year, history suggests investors are less likely to experience losses over longer periods—especially in a diversified portfolio.  

Reacting with fear during market downturns and withdrawing your investments could mean missing out on potential rebounds, which is why investors should focus on time in the market, not timing the market. Over the last 20 years, seven of the 10 best days occurred within 15 days of the 10 worst days. ​
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The bottom line 
With an understanding of what it takes to build your portfolio, now is the time to get started! You can open a brokerage account online at any time and you can connect with a financial advisor in person to learn more about investing products, so you can build the right portfolio for your financial needs and goals.  
  
For informational/educational purposes only: Views and strategies described in this article or provided via links may not be appropriate for everyone and are not intended as specific advice/recommendation for any business. Information has been obtained from sources believed to be reliable, but JPMorgan Chase & Co. or its affiliates and/or subsidiaries do not warrant its completeness or accuracy. The material is not intended to provide legal, tax, or financial advice or to indicate the availability or suitability of any JPMorgan Chase Bank, N.A. product or service. You should carefully consider your needs and objectives before making any decisions and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results. JPMorgan Chase & Co. and its affiliates are not responsible for, and do not provide or endorse third party products, services, or other content. 
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