Swagatalakshmi Roychowdhury
Determine your investment goals
Planning is step one to building up a portfolio. What are your short-term, medium-term and long-term goals? Are you planning to save up for a house or a business?
Evaluate your risk tolerance
Are you okay to risk more and earn more "reward" or do you prefer a slow, steady portfolio growth? This helps decide your asset allocation. Besides your ability to take on risks, risk tolerance is also related to your age, time horizon, income and financial situation.
Select assets from different asset classes and industries
You need to diversify your portfolio, aka, keep eggs in multiple baskets. Generally speaking, an aggressive risk tolerance will feature a greater allocation to stocks, while a more conservative portfolio will hold relatively more bonds and cash.
Monitor your portfolio periodically
It is important to check up on your portfolio every once in a while, to ensure that you're not incurring more losses than gains. Moreover, if your circumstances change, it might help to realign your portfolio assets based on your existing needs.