Ace Alabama Financial Literacy 2026 – Boost Your Money Smarts and Shine!

An investment portfolio is defined as a collection of various financial investments, which may include stocks, bonds, mutual funds, real estate, and other assets. The purpose of having a diverse portfolio is to spread out risk and increase the potential for returns. By combining different types of investments, an individual can reduce the impact of poor performance in any single investment, as gains in one area can offset losses in another. This diversified approach is a fundamental principle of investing.

The other options do not accurately capture the concept of an investment portfolio. A single type of financial investment refers to just one asset without any diversification, which does not reflect the portfolio's nature. A detailed account of expenses and income describes personal budgeting or financial statements, rather than investment holdings. Lastly, a record of physical assets owned does not pertain specifically to financial investments but rather to tangible property, which is a different category altogether.