THE PORTFOLIO CONCEPT
A portfolio has various definitions, but in general terms a portfolio is the total value realized from the owned assets’ being invested into at least two different instruments which either share the same features or are inherently different from each other.
(Istanbul Securities Exchange [²ÌÊÂ], 2008, p. 7). In the field of finance, portfolio is a mixture including various investments (i.e., bonds, treasury bills) held by a person or an organization. The underlying idea of a portfolio is to minimize the risks. Having various instruments, some sort of risks can be avoided.Practically speaking, nearly everybody possesses a portfolio. These portfolios may include real assets (e.g., cars, houses or estates) or financial assets (i.e., bonds or bills) (Elton & Gruber, 1995, p. 2). It is possible to create a portfolio through random decisions or via very detailed plans, and creating a highly profitable portfolio requires a deep understanding of the principles underlying rational portfolio selection and successful portfolio management.
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