Portfolio Management
Portfolio management is the art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance. Portfolio management is all about determining the right mix of investments to achieve a desired return on investment. It involves selecting the right mix of assets, such as stocks, bonds, and cash, and allocating them in the right proportions to meet the investor’s goals. It also involves monitoring the performance of the portfolio and making adjustments as needed.
History of Portfolio Management
Portfolio management has been around since the early days of investing. The first recorded use of the term was in the early 1900s, when it was used to describe the management of a portfolio of stocks and bonds. Since then, portfolio management has evolved to include a wide range of investments, including mutual funds, exchange-traded funds, and other alternative investments. The modern portfolio management process is a combination of both art and science, and involves a deep understanding of the markets, the economy, and the investor’s goals.
Table of Comparisons
| Investment Type | Risk Level | Return Potential |
|---|---|---|
| Stocks | High | High |
| Bonds | Low | Low |
| Mutual Funds | Medium | Medium |
| Exchange-Traded Funds | Medium | Medium |
Summary
Portfolio management is the process of selecting the right mix of investments to achieve a desired return on investment. It involves selecting the right mix of assets, such as stocks, bonds, and cash, and allocating them in the right proportions to meet the investor’s goals. It also involves monitoring the performance of the portfolio and making adjustments as needed. For more information on portfolio management, investors can visit websites such as Investopedia, The Balance, and Morningstar.
See Also
- Asset Allocation
- Risk Management
- Investment Strategy
- Diversification
- Rebalancing
- Portfolio Theory
- Modern Portfolio Theory
- Portfolio Optimization
- Portfolio Performance Measurement
- Portfolio Risk Analysis
