How to build an investment portfolio: Strategies for any age

An investment portfolio is the collection of investments you have at a given time. It might include 401(k)s, stocks, bonds, money market accounts, or real estate. Building the right portfolio is the core of a savvy investment strategy.

In this investment guide, we cover the basics of portfolio building for investors of all ages.

Why having a portfolio strategy matters

To build a successful investment portfolio, you need a strategy aligned with your goals and other factors, such as your risk tolerance and life stage.

Goals and timelines

There's always risk when you invest, but establishing specific goals can help guide you to know when to use any earnings. 

How long do you have to reach your goal?

Younger investors often have longer time horizons — meaning more time to invest and to recover losses. For example, a 35-year-old saving for college or retirement may be able to take on more risk than a 65-year-old concerned about maintaining their lifestyle on a fixed income.

#1 family finance and safety app.

#1 family finance and safety app.

Teach your kids and teens to earn, save, and invest with Greenlight.

Use code GLBLOG for one month, on us.*

Try Greenlight today

How do you plan to use the money? 

Think about how much money you need to achieve a given goal, and whether you need a steady influx of cash or a one-time windfall. For example, if you want to supplement your retirement, you could consider "income investing" — building a portfolio that generates regular payouts, such as rental income from real estate. That portfolio may look very different than one for buying a first home. 

Other common approaches include growth investing and value investing. Value investing is about protecting what you have, while growth investing pushes for the maximum possible returns. 

Map out your goals, circumstances, and personal risk tolerance to help determine a comfortable portfolio strategy.

Types of investments

Different types of investments have different risk and return patterns. The big ones to know are:

• Stocks: A share of ownership in a company, also known as an equity share

• Bonds: Money you loan to a corporation or government, usually offering more stability but lower returns compared to stocks.

• Cash and equivalents: Deposit-based accounts, such as money market funds, savings accounts, and certificates of deposit

Cash equivalents are generally less risky than stocks or bonds, but they have a lower potential for significant gains.

Getting started: Foundational concepts for all ages

Now that you have the basic vocabulary, it's time to think about what kind of investor you are. How do you feel about losing money in pursuit of longer-term gains? How you answer that question determines your risk tolerance. Investment risk tolerance is a spectrum—and you might identify with all of them at different stages of your life!

Some people with high risk tolerance aim for the highest returns possible, even if it means potentially losing most or all of their initial investments along the way. Highly risk-tolerant investors tend to have stock-heavy portfolios. 

Low-risk-tolerant investors are less willing (or able) to accept losing the money they initially invested. Those more focused on stability might have more bonds and cash equivalents in their portfolios. 

If you fall somewhere in the middle — willing to lose a little, but not willing to lose your life savings to catch a unicorn — you might look at building a portfolio based on diversification (multiple investment types that balance risk and return).

Portfolio strategies by age group

It's never too early — or too late— to learn how to build an investment portfolio from scratch. The key is to develop age-appropriate investment strategies tailored to your experience level, life stage, and future goals. 

For kids and teens:

• Start by learning stock market fundamentals.

• Practice with parent approval. Greenlight's investing for beginners app© lets kids research companies and invest with as little as $1 — parent approval required.

• Micro investing. You can purchase small pieces of multi-stock products, such as exchange-traded funds (ETFs) and index funds, which track stock categories like the S&P 500.

• Custodial accounts. Parents manage the account, but your child legally owns the assets.   

In your 20s:

This is a great time to lay the groundwork for long-term investing. Starting early can mean more opportunity to take risks on high-growth potential products and practice risk management. It's also a great time to automate savings and investment contributions for consistency and to maximize potential gains.

In your 30s: 

If you've established a solid foundation, you might start ramping up wealth building and momentum. To start balancing growth with steps toward stability, you might emphasize long-term life goals such as homeownership, family planning, or retirement.

In your 40s:

At this stage, many people shift toward more risk management, focusing on short-term goals such as mortgages and their kids' education. Take steps to diversify your portfolio if you haven't yet, and consider prioritizing retirement savings and allocating a larger portion to lower-risk assets. 

In your 50s:

It's common to start shifting toward portfolio security and asset preservation. Maximize retirement catch-up contributions and evaluate options like bonds and annuities for future income.

At 60 and beyond:

Retirement planning often involves prioritizing more secure investments and generating income through dividends and bonds. It's also wise to create a withdrawal plan that accounts for any required minimum distributions (RMDs) from retirement accounts.

Mistakes to avoid when building a portfolio

Learning how to build an investing portfolio is partially trial and error — and the more you know, the easier those errors are to avoid. Top rookie mistakes include:

• Asset hyperfocus: Enthusiastic beginners often focus too heavily on a single asset type, such as stocks. If you spread the wealth and diversify from day one, stock market swings are less likely to ruin your strategy.

• Chasing high returns: Remember that big payouts rarely happen without significant risk. Know what you're putting on the line and that you can afford to lose it if the investment doesn't pay off.

• Forgetting fees and taxes: Stock trading is rarely free. Many platforms charge a fee to buy and sell stocks, and you'll pay taxes on any gains from stocks you sell.

Portfolio building is a lifelong journey

Financial planning is like life: Every new stage comes with new opportunities. Keep learning and discovering new ways to refine your strategy. Stay focused on your goals, start small, and continuously reevaluate. 

Make smart money moves. Say 👋 to Greenlight, the family money and safety app that makes financial education part of everyday life. Try Greenlight, one month, risk-free.†

© 2025 Greenlight Investment Advisors, LLC, an SEC Registered Investment Advisor provides investment advisory services to its clients. Investing involves risk and may include the loss of principal. Investments are not FDIC-insured, are not a deposit, and may lose value.