Introduction to Core vs. Noncore Investments

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A core holding is just what it sounds like: the central part of your portfolio. The core requires investments that will be reliable.

What you will learn

  • What Makes a Core Mutual Fund?
  • What about Core Stocks?
  • How Big Your Core Should Be

What do you know?

Introduction to Core vs. Noncore Investments

The core-holding concept has to be one of the most exciting investing ideas since Christopher Columbus started cold-calling potential backers.

Okay, that’s sarcasm. "Core holding" and "exciting" don’t go together. But what core holdings lack in thrills, they make up for in importance.

A core holding is just what it sounds like: It’s the central part—or maybe even the only part—of your portfolio. The core requires investments that will be reliable year in and year out. They’re the solid foundation for the rest of a portfolio.

Once you’ve built your portfolio’s core, you can then reach for noncore investments to augment those core holdings. Noncore investments might focus on an individual sector, such as health care, or a single region, such as Latin America. Because they’re more focused, noncore investments have the potential to increase returns, but they may also jack up a portfolio’s volatility level.