Portfolio Management and its Process
Portfolio Management Definition: Portfolio Management, implies tactfully managing an investment portfolio, by selecting the best investment mix in the right proportion and continuously shifting them in the portfolio, to increase the return on investment and maximize the wealth of the investor. Here, portfolio refers to a range of financial products, i.e. stocks, bonds, mutual funds, and so forth, that are held by the investors Portfolio Management Process Portfolio management is a complex activity which may be broken down into following steps: Step 1. Specification of Investment Objectives & Constraints: The typical objectives sought by investors are current income, capital appreciation and safety of principal. The relative importance of those objectives should be specified. Further, the constraints arising from liquidity, time horizon, tax and special circumstances must be specified. Step 2. Choice of the Asset Mix: The most important decision in t...