What is Portfolio Management?
It is an art of managing an individual investment which will lead to minimum risk and maximum returns. The one who manages the portfolio of an individual will help him with his investments which could be in the form of cash, equity, mutual funds, bonds etc.
Why is Portfolio management important?
If a person is managing his investments through the portfolio management, it will help him to minimize his risks with maximizing returns. Through this he will be able to take maximum gains as per his income , budget, age and his ability to take the risks.
Who are Portfolio Managers?
Portfolio Manager will help their clients by making a customised investment plan according to his budget and willness to take risks. He will help his client from the start by making him understand all the options available , where all he could invest his money, how will he benefit out of it and also eventually managing everything for him.
Types of portfolio Managemen
- Active Portfolio Management – The goal of an Active Portfolio Manager is the try and get maximum returns by buying stocks when they are cheap and by selling them when they are on a rise. For it to be successful it is important the Active portfolio manager is capable to handle it.
- Passive portfolio Management- It is the complete opposite of Active Portfolio Management. It is basically for those people who are looking for long term investments. Lower cost is the primary benefit of passive investing, as this strategy is probably the cheapest to implement.
- Discretionary Portfolio management- The discretionary approach to the portfolio management gives the Portfolio manager complete control of the funds of the particular client. He has all the liberty to use the funds given by the client as and how he thinks is the best for the highest gains. The client hand over this power to an expert he thinks is the best for his job.
- Non- discretionary portfolio management- This approach means that the client gives access of his funds which he wants to invest to a financial expert without relinquishing control of the investment decisions. The advisor will give the pros and cons of investing in a particular market or strategy, but wont execute it without the permission.
