Portfolio Management

Approaches of Investment Portfolio Management

Different investors follow different approaches when they deal with portfolio investments. Four basic approaches of investment portfolio management are illustrated below, but there could be numerous variations.

  1. The Holy-Cow Approach:  These investors typically buy but never sell. He treats his scrips like holy cows, which are never to be sold for slaughter. If you can consistently find and then confine yourself to buying only prized bulls, this holy cow approaches may pay well in the long run.
  2. The Pig-Farmer Approach:  The pig-farmer on the other hand, knows that pigs are meant for slaughter. Similarly, an investor adopting this approach buys and sells shares as fast as pigs are growth and slaughtered.
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Scope and Objectives of Investment Portfolio Management

Scope of Portfolio Management

Portfolio management is a continuous process. It is a dynamic activity. The following are the basic operations of a portfolio management.

  1. Monitoring the performance of portfolio by incorporating the latest market conditions.
  2. Identification of the investor’s objective, constraints and preferences.
  3. Making an evaluation of portfolio income (comparison with targets and achievement).
  4. Making revision in the portfolio.
  5. Implementation of the strategies in tune with investment objectives.
Objectives of Portfolio Management

The objective of portfolio management is to invest in securities is securities in such a way that one maximizes one’s returns and minimizes risks in order to achieve one’s investment objective.… Read the rest

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Definition of Portfolio Management

Portfolio Management Definition

It is a process of encompassing many activities of investment in assets and securities. The portfolio management includes the planning, supervision, timing, rationalism and conservatism in the selection of securities to meet investor’s objectives. It is the process of selecting a list of securities that will provide the investor with a maximum yield constant with the risk he wishes to assume.

The portfolio management is growing rapidly serving broad array of investors — both individual and institutional — with investment portfolio ranging in asset size from few thousands to crores of rupees. Despite growing importance, the subject of portfolio and investment management is new in the country and is largely misunderstood.… Read the rest

Abey Francis

What is Investment Portfolio?

Meaning of  Investment Portfolio

A portfolio is a collection of securities. Since it is rarely desirable to invest the entire funds of an individual or an institution in a single security, it is essential that every security be viewed in a portfolio context. An investment portfolio comprising of different types of securities and assets.

As the investors acquire different sets of assets of financial nature, such as gold, silver, real estate, buildings, insurance policies, post office certificates, NSC etc., they are making a provision for future. The risk of each of such investments is to be understood before hand. Normally the average householder keeps most of his income in cash or bank deposits and assumes that they are safe and least risky.… Read the rest

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Financial and Economic Meaning of Investment

Investment is the employment of funds with the aim of getting return on it. In general terms, investment means the use of money in the hope of making more money. In finance, investment means the purchase of a financial product or other item of value with an expectation of favorable future returns. Investment of hard earned money is a crucial activity of every human being. Investment is the commitment of funds which have been saved from current consumption with the hope that some benefits will be received in future. Thus, it is a reward for waiting for money. Savings of the people are invested in assets depending on their risk and return demands.… Read the rest

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Need of good investment decisions

Investments are both important and useful in the context of present day conditions. The following points have made investment decision increasingly important.

  1. Planning for retirement
  2. Interest rate
  3. High rate of inflation
  4. Increase rate of taxation
  5. Income
  6. Investment channels

1. Planning for retirement:

A tremendous increase in working population, proper plans for life span and longevity have ensured the need for investment decisions. Investment decision have becomes significant as working people retire between the age 55 and 60. The life expectancy has increased due to improved living conditions, medical facilities etc. The earnings from employment should, therefore, be calculated in such a manner that a portion should be put away as savings.… Read the rest

Abey Francis