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Portfolio Management

A portfolio is a group of investments in stocks, bonds and cash.  A portfolio is created according to how much risk the investor wants to accept and their particular investment objectives.  Investment portfolios may be managed by financial professionals, hedge funds, banks, or by individual investors.  Active portfolio management is where the investor chooses to outperform the investment index and makes changes to his portfolio accordingly.  In passive portfolio management, the investor usually does not make many changes, trusting the index.

Find out more information about portfolio management by contacting an investment professional. Find a local portfolio management professional in your area.

There are many types of portfolios and it is common for the investor to want a balanced portfolio since this is a safer approach to investing.  A balanced portfolio means spreading investments across different classes of assets such as stocks, bonds, and cash, in order to manage risk.  Usually the amount of stocks versus bonds in a portfolio is very important since it is a determining factor in asset allocation.  

A local financial planner can help you properly manage your portfolio by addressing the following issues:

  • Creating a Balanced Portfolio
  • Diversification
  • Liquidity
  • Minimizing Risks
  • Maximizing Return
  • Overseas Investments
Market risk and return is an important factor to consider when choosing investments. If higher expected returns are a priority, then there is more risk. Market trends have proven that the riskier the investment is, the higher the return. There are several ways to calculate portfolio returns and performance.  One way to measure return is to use quarterly or monthly money returns. However the most popular method used by many investors in financial markets is the time weighted method.  There are also other models for measuring the performance of a portfolio's returns which uses comparisons to an Index.
Asset allocation is very important when forecasting returns for an investment portfolio.  Asset allocation is a method that balances market risk and return by allocating the percentages of each investment in an investment portfolio according to the investor’s individual goals, how much risk the investor wants to accept, and the length of time they will be investing.  According to the Journal of Financial Planning, many financial experts say that asset allocation is based on the principle that certain assets perform differently in certain market and economic conditions.  

Find out more information about portfolio management by contacting an expert. Contact a local financial professional today.