Recently, I’ve been thinking about a question: why do some people invest and make money, while others lose everything? I’ve found that the difference often isn’t in stock-picking ability, but in whether they’ve done proper planning for their investment portfolio.

Did you know? An investment portfolio (portfolio) is actually an art—putting your eggs in different baskets. Simply put, it means holding a certain proportion of multiple financial assets—such as stocks, funds, bonds, bank deposits, and even cryptocurrencies—with the goal of pursuing returns while minimizing risk. This logic is like eating: balanced nutrition is what keeps you healthy, and diversification is what makes investing more solid and resilient.

I’ve noticed that many beginner investors don’t really know how they should allocate their assets. There’s one key factor in this—risk preference. Some people naturally love taking risks, while others are more conservative. If you’re the kind of young person who’s bold and willing to try, an aggressive allocation like 50% stocks, 30% funds, 15% bonds, and 5% bank deposits might be a better fit for you. But if you’ve already retired, or you’re satisfied with your current assets, then you should shift to a conservative strategy—stocks at only 20%, bonds at 35%, and funds at 40%.

Age also matters a lot. A 28-year-old working professional who loses 30% can still bounce back, because there’s still plenty of time to work and earn money. But a 65-year-old retiree can’t tolerate that kind of volatility. So the same investment allocation plan carries completely different levels of risk for people of different ages.

There’s another point that many people overlook—the market environment. I’ve seen data showing a huge difference in performance between emerging markets and developed markets. From 2020 to 2022, emerging market ETFs (EEM) fell 15.5%, while Eurozone ETFs (EZU) dropped only 5.8%. Why? Because emerging markets are more easily affected by uncertain factors like geopolitics and economic policies, and companies are also more concentrated in volatile sectors such as resources and energy. In contrast, companies in developed markets are far more diversified.

So how should beginners get started? First, you need to figure out your risk tolerance. There are plenty of risk assessment quizzes online—do one, and you’ll know whether you’re an aggressive, neutral, or conservative investor. Then set your investment goals based on that—are you aiming for rapid growth of wealth, for preservation, or do you need cash you can access at any time?

Let me give an example. Suppose you’re 28 years old, you have 1,000,000, and you want to double it to 2,000,000 in 5 years. You could allocate 50% to stocks, 30% to funds, 10% to bank fixed-term deposits, and keep the remaining 10% as emergency funds. This way, you get growth potential without pushing yourself to the breaking point.

But here’s an important reminder: building an investment portfolio isn’t a one-and-done task. The market environment changes, and so does your situation, so you need to regularly review and adjust your allocation. Also, set your take-profit and stop-loss points. Diversify assets across different regions and industries. Most importantly, stay calm—don’t let short-term fluctuations scare you.

To be honest, many people lose money not because they picked the wrong assets, but because they didn’t adjust their mindset. The essence of portfolio allocation is balancing risk and return, but whether you can truly profit from it depends on whether you have the ability to evaluate regularly and make rational decisions. This financial philosophy can also be put into practice on platforms like Gate, because they offer a wide range of assets, making it easier for you to build an investment portfolio that’s truly your own.