Portfolio Management Basics

Portfolio Management helps you to diversify wisely.Portfolio Management is the proper allocation of various investments, via diversification, for minimizing risk as much as possible.

Allocating your funds right is the way to spread your risk wisely, and diversify your opportunities.

A Portfolio Manager is a person who is responsible or has a team obliged to ensure the proper management of clients’ or organizations’ funds.

Therefore, the role of a Portfolio Manager is critical as it involves the handling of other entities’ funds.

Issues such as improper and wrong decisions can bring losses to the entities, as well as expose the Portfolio Manager, and or his or her team.

Portfolio Management SWOT analyzes your investment’s future

Portfolio Management is mostly a SWOT analyzing technique or tactic where the manager interprets the strengths, weaknesses, opportunities, and threats of an asset, financial instrument, etc.

The procedure, before making the decision to invest or allocate a financial instrument or asset in a portfolio, is the following:

  1. Does the asset or financial instrument worth the investment?
  2. Will such asset bring long-term profit?
  3. Can this asset minimize the risk when traded in a group with other assets?
  4. What is the exposure level of this particular asset?
  5. What are the threats, should it be a case where the investment in this asset goes wrong?

Furthermore, Portfolio Management is investing for the long-run, foreseeing profit from a long-term perspective.

It could take the form of daily trading but the objective is long-term planning.

A portfolio includes, among other assets, the following financial instruments:

  • Forex
  • Commodities
  • Stocks
  • Indices
  • Bonds
  • Other financial assets

Are you a qualified Portfolio Manager? If so, you should already know by now the procedure in brief.

Are you an investor? It is important to choose your Portfolio Manager right, as a minor mistake in your choice could result in an enormously devastating financial outcome.

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