Definition of a Trading Portfolio

A trading portfolio consists of different investment vehicles. An investor can own different trading portfolios, each geared towards a different investment strategy. A trading portfolio might hold stocks, cash, futures, currency and more.

Trading vs. Buy-and-Hold

Traders traditionally take an active approach to investing, seeking shorter-term gains vs. long-term appreciation. Investors that use a buy-and-hold strategy invest for long-term appreciation.

Trading Portfolios

A trading portfolio generally consists of investments the owner actively trades. The portfolio can consist of more than stocks.

 

Money Management

In the past, money managers generally managed the activity in a trading portfolio. Today more and more investors manage their own trading portfolios. High-net worth individuals typically still utilize a money manager.

 

Tax Implications

Tax implications for trading portfolios can significantly differ from buy-and-hold portfolios. Higher tax rates normally apply to short-term capitals gains.

 

Diversification

Hard and fast rules do not apply. A trading portfolio can consist of actively traded short-term investments as well as long-term, buy-and-hold investments.

 

References

About the Author

From 2002-2006, Kenneth Hamlett was publisher and head writer for UNSIGNED Music Magazine, an online publication with over 100,000 readers. Prior to establishing UNSIGNED, Hamlett was a business solutions analyst and spent 15 years formulating and writing proposals for supply chain business solutions. He is a graduate of the New York Institute of Photography.