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How to build a portfolio

If you're new to investing, it can look complicated. But it doesn't need to be. This is part 3 of 5 parts.

By MSN Money staff

The editors at MSN Money have put together this Beginner's Guide to Investing to help you start putting your money to work:

Choose five mutual funds that will cover all your investing bases.

By investing in companies of different size, multiple sectors of the economy and other parts of the world, you reduce the chance that problems in any one area will sink your investing goals (learn more about diversification in the video to the right).

We've built a starter portfolio of funds (see below). Our main criteria: strong, consistent performance; low fees; and a stable, investor-friendly management company standing behind the fund.

You can build this portfolio with a little more than $10,000 to start.

Or take a look at some similar funds in each of the fund categories we used for our portfolio: large-company stocks, small-company stocks, international stocks, bonds and commodities. Use our Mutual Funds Research page as a starting-off point for your explorations.

To buy funds from different companies, work with a discount or online broker that offers access to funds from a broad range of fund families. (Click here to find a broker.)

Money's starter portfolio

The interactive chart below allows you to display the performance of the investments in MSN Money's starter portfolio. You can change the time frame of the chart and investigate each item. If you want more information click on the link to see the detailed quote page. Once you're done continue to part 4 of the beginner's guide.

Part 4: Follow a guru

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Updated Nov. 3, 2009