• Learn why you should maintain a stock portfolio.stocks and shares image by Andrew Brown from Fotolia.com
  
  A stock is a share of a company, or an ownership stake within that given company. Individuals can invest on stocks either through a full-service broker who buys stock for them, or by themselves using an online discount brokerage firm. When you invest in several different stocks, the body of stocks you invest in is referred to as your stock portfolio. There are several reasons why it may be a good idea to maintain a stock portfolio.
  
  

Growing Your Money

• According to the Motley Fool, the growth of investments in stock has historically outpaced most other types of investments. While investing in a certificate of deposit (CD) or money-market or savings account has less risk, the growth rate is usually relatively small---under 5 percent even in good times. For stocks, on the other hand, A to Z investments reports that between 1990 and 1999, the average investment in a stock fund (a group of stocks) gained 23.6 percent per year. While there were tough economic times in 2000 when the "tech bubble" burst, and tough economic times in 2007 and 2008 when the "real estate bubble" burst, in 2009, the Standard & Poor's 500 index (a list of 500 large company stocks) made 23.5 percent for the year and the Dow Jones industrial average (a list of 30 large companies that are traded on the stock market) made 18.8 percent. This suggests if you can invest your money for the long haul and wait out bad times, you will be able to grow your money much more quickly in a stock portfolio.
  
  

Diversifying Your Investments

• Stocks allow you a lot of diversity in what you invest in. You can buy shares in many different types of companies---blue-chip companies, which are long-reliable and established; mid-cap companies, which are mid-sized; and small-cap or growth companies, which are smaller but potentially poised for tremendous growth. Each type of stock has a different level of risk and a different potential for reward. You can thus target your investing to either take more risks and potentially grow more, which is a good idea when you are younger, or invest in safer stocks when you are older. The range of options to invest and companies to buy makes stocks a great purchase.
  
  

Saving for Retirement

• Many individuals maintain a stock portfolio in order to save for retirement. For example, you can open an individual retirement account (IRA) and invest using tax-free dollars to buy stocks within the account. There are even targeted "funds" you can buy. A mutual fund is an investment in which a professional money manager will combine your money with many other people's to buy a group of stocks. If you buy a targeted fund, you buy a fund that relates to the date you are going to retire, and the mutual fund manager then buys stocks and other investments with an appropriate risk level, considering how long you are going to keep your money in the market.