Shares/ share portfolio?

Question

people who own shares are said to have a portfolio. what is a portfolio though? and what is the relationship between a share and one particular form of business ownership? thanks

Answer 1

A portfolio is the total collection of all your investments.  It could look something like this:

55% Stocks

35% Mutual Funds

10% Roth IRA's

People always say that its important to "diversify your portfolio".  They mean you should spread out your investments so that you are well covered if one of your investments takes a hit.  

A share is simply a small chunk of a company that is available for purchase on the stock exchange.  So when you buy 100 shares of a company, you own 100 tiny slices from the pie, which may be composed of millions of shares.  When the company does well, the share price will rise and the percent increase is the percent you will gain as profit.  So if the share price rises 20% from the price you purchased it, you just gained 20% on your initial investment.  

Answer 2

A portfolio is an appropriate mix of or collection of investments held by an institution or a private individual.

A share is only part ownership as opposed to owning the whole business yourself.