Portfolio Management and its objectives

Portfolio Management and its objectives

Investors rarely place their entire wealth into a single asset or investment. Rather, they cons trust a portfolio. A portfolio is a combination of two or more securities or assets. Portfolio management refers to the professional management of securities and other assets. It includes a range of professional services to manage an individual’s and company’s securities, such as stocks and bonds, and other assets, such as real estate. It refers to managing the money of an individual under the expert guidance of portfolio managers.

The primary objectives of portfolio management are to minimize risk and maximizing return. And other objects are as follows –

(1) Diversification of investment: In order to the diversification investment portfolio is taken. None only invest in a single asset invest in a various asset is less risky.

(2) Safety of capital: In order to esurient of an investment portfolio is taken.

(3) Fixed income: Portfolio management ensures a fixed income.

(4) Reducing risk: Portfolio reduces the risk of an investment.

(5) Investment mixed: Here investment into different assets ensured more safety.

(6) Wealth maximization: In order to maximize wealth portfolio is taken.

(7) Liquidity: The portfolio should ensure that there are enough funds available at short notice to take care of the investor’s liquidity requirements.

(8) Safety of the investment: The first important objective of a portfolio, no matter who owns it, is to ensure that the investment is absolutely safe.