What is portfolio management?
The method of maximising returns is known as portfolio management, on an individual’s investments, such as bonds, equities, cash, and mutual funds, within a given time frame. It is the art of an individual managing his or her money with the help of a portfolio manager.
Because the investment world is so volatile, financial portfolio management includes asset allocation and rebalancing. With the quick changes that occur throughout time, one sector may become less popular than another, and vice versa. As a result, only a nimble investor can earn handsomely from the world’s stock markets.
By significantly overweighting and underweighting various investment sectors, such as those listed below.
1. Commodity
2. Cash
3. Currencies
4. Bonds
5. Stock/Share sectors
6. Real estate.
There are different types of portfolio management: -
1. Discretionary portfolio management
2. Non Discretionary portfolio management
3. Passive portfolio management
4. Active portfolio management
How we do portfolio management in practice differs from how we do it in school. Investors do a market study of several schemes and their historical performance. Fund managers contribute their experiences and risk-reward ratios and then choose the fund they will put their money into.
