Holdings are the ingredients that make up an investment portfolio. As investments come in all shapes and sizes, so do holdings. When an individual or entity – such as a mutual fund or pension fund – allocates funds for investment, the variety of investments to choose from can include stocks, bonds, mutual funds, options, futures, and exchange-traded funds (ETFs).

The diversity and range of the investments in a portfolio should create a strong foundation for success. Under a well-managed strategy, the different holdings within an investment portfolio can maximize an investment's opportunity for growth and/or income while preserving capital. By diversifying, an investor's money is spread across different asset types, reducing their exposure to risks associated with any single holding. For example, if an investor’s holdings include large-cap stocks, mid-cap stocks, and small-cap stocks, the fund could benefit from all three sectors at different points in their respective business cycles.

Investment selection should be part art and part science, taking into account the goals of the holders and the market volatility. Investment managers must select the right mix of holdings to reach the desired return goals while taking into account the costs, fees, and different risks associated with the investments. Seeking expert guidance can help investors craft diversified portfolios that fit specific needs.

Holdings form the cornerstone of an investment portfolio, serving as the foundation for success. By ensuring that the portfolio is diversified and well-positioned against market risks and volatility, holders can expect strong returns from their investments and capitalize on results over the long-term.