Portfolio Management

Portfolio management is process of decisions making about managing an individual’s investments in the form of mutual, Sip, Insurance etc. which will meet the long-term financial goals and risk tolerance of an investor.

• Do not put all your eggs in one basket – Because it always a risk in investing money in one single place.
• A Portfolio should always Well Balanced and Diversify
• Portfolio management is important because it covers a certain amount of risk through diversification and shuffling of funds among different assets according to the returns they are generating. It also helps in planning regarding tax obligations. Moreover, it helps in arranging funds in times of emergencies

Having a portfolio is one of the wisest financial decisions one can take. Although managing a portfolio would require some serious thinking and skills on one’s part.

A portfollo should be made according to the risk appetite age, and flnanclal obligations of an individual. The more diverse it is, the safer it is.

Now, let us see some more benefits of having a well balanced and diversified portfolio.

• Meeting Long Term Financial Aims – Since the capital is diversified among different financial instruments. It is quite possible that even after having some losses, the financial target is achieved.
• Reduces Risk – Not all the sectors of an economy start performing badly simultaneously. Therefore, let’s say. if some loss has been incurred in real estate, It is possible that good profit would have been earned In mutual funds or stocks. etc. This reduces the risk factor on the overall portfolio of an individual.
• The Benefit of Shuffling investments – ThisIs an important benefit of having a good portfolio. If one can identify the signs of the upcoming poor performance of a particular asset, then the funds allocated to that asset can be withdrawn and invested in another good performing asset.