That being said, the overall risks to the portfolio will vary, depending upon the type of stock that is purchased and how much diversification is being utilized. ("What are the Main Types of Stock.," 2010)
How much does a stock contribute to the return of a portfolio?
Historically the average return of the S&P 500 has been 9.8% a year. (Swedroe, 2009) However, the overall impact of the return will depend upon: the underlying amounts of growth and dividends that are received. These two factors are important, because they can cause the total return of the portfolio to vary. As a result, the overall contribution of stocks, on the return of the portfolio; will depend upon the type of equity securities that are being purchased and the holding period.
Clearly, the underlying amounts of risks and rewards will depend upon a number of different factors. As far as risks are concerned, the biggest issues would be: the amount of diversification that is used and the type of stocks that are purchased. These are important, because they will determine the possible risk that different stocks will have upon the portfolio. As those equity securities that are more income orientated, will have less risk in comparison...
Stock Portfolio Management Project Selected 10 companies Company Symbol purchase date purchase price Apple, Inc. APPL Industry/Sector: Technology/Personal Computer -- Investment Style: Large Growth Brocade BRCD Communications Systems Inc. Industry/Sector: Technology/Data Storage -- Investment Style: Small Growth Joy Global Inc. JOYG Industry/Sector: Farm/Const/Mach -- Investment Style: Large Growth Ctrip.com CTRP Industry/Sector: Consumer Services -- Investment Style: International Gerdau SA GGB Industry/Sector: Steal & Iron -- Investment Style: International Gol Linhas GOL Aereas Inteligentes SA Industry/Sector: Regional Airline -- Investment Style: International Green Mountain GMCR 10/21/2009 Coffee Roasters Inc. Industry/Sector: Processed Pkgd gds -- Investment Style: Small Growth Rio Tinto PLC RTP 10/21 /
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