It is as easy to build a portfolio on a shoestring as it is to start investing with a million bucks. For as little as $50, you can start buying mutual funds, or for $25, you can start buying individual stocks.

Where to start? Even if you are a beginning investor, think in terms of building a portfolio rather than of buying one or two stocks or a couple of mutual funds. Planning and diversifying will serve you best in the long run.

But what is a portfolio? A portfolio is a collection of investments like stocks, artwork, bonds, gold and real estate. Your portfolio consists of all the assets you own. It represents the choices you’ve made with your money. Perhaps what you have now, as a college student, is only a portfolio of credit-card debt.

The first step in building a portfolio is to assess your financial picture by determining your investment objectives, as well as establishing an acceptable risk tolerance level.

Next, look at the constraints that may be involved when building your portfolio. Constraints to consider are your time horizon and liquidity needs. Your time horizon is perhaps the most important constraint. Time can be an investor’s best friend or worst enemy. The longer the time horizon, the more risk the portfolio can tolerate. Liquidity is the ability to readily convert an asset into cash.

Your portfolio should fit your investment goal. Maybe you’re investing for education, marriage, children or retirement.

Whatever your goal, it gives you vital information. It tells you how long you’ll be investing and how much of your investment you can put at risk. The closer your goal, or the less you can afford to lose, the more you should focus on preserving your capital.

Beginners are usually advised to start with mutual funds because each mutual fund represents a portfolio, in this case, a portfolio of securities. It might be stocks. Or bonds. Or both.

When you look at the prospectus, you’ll find out what the manager buys and what is in the portfolio.

Regular investments -- monthly is best -- are important in building your portfolio. Many good fund groups waive their initial minimum investments -- which might be $10,000 or more -- if you are willing to make regular investments deposited directly from your paycheck or bank account.

Regular, systematic investing also imposes an important discipline. One of the biggest mistakes novice investors make is buying and selling with their emotions. When the market soars, they buy; when it sinks, they sell, just the opposite of what a successful investor does. Signing up for an automatic investment program puts you on automatic pilot and removes the temptation to try to time the market.

How many investments should you have? The problem with owning too many stocks is that you can easily lose sight of the forest for the trees. You start out as an investor with an investment goal and a portfolio tailored to you, and turn into a collector who has forgotten what your goals are.

After building your portfolio, it requires regular reviews. You need to supervise it to make sure it stays on track. Look for unexpected changes in your portfolio. If you find some, you need to determine how significant these changes are, and if they in any way threaten your long-term investment plan or your portfolio’s short-term volatility characteristics.

An investment professional can be extremely helpful in assisting you in creating your investment policy statement. They can also help you in building your stock portfolio. So go ahead and diversify.