Balancing Stability and Growth: The Core vs. Satellite Portfolio Strategy

A core portfolio forms the foundation of your investments, emphasizing steady and reliable growth. It usually consists of well-established large-cap stocks or index funds that you hold for the long term, prioritizing stability and consistent returns. For example, a core portfolio might include:

On the other hand, a satellite portfolio is where you embrace more risk for potentially higher rewards. This part of your portfolio includes smaller, growth-oriented stocks or sector-specific funds. The satellite portion is more dynamic, often adjusted based on market trends to capitalize on emerging opportunities. Examples of satellite investments might include:

The key difference is that while the core portfolio anchors your investments with low-risk, stable returns, the satellite portfolio allows you to take calculated risks to potentially boost overall performance.