Portfolio management involves activities that help investors achieve the desired investment objectives. Portfolio management is the organization and business management process or other institutions with the aim of maximizing maximum profit. Portfolio management ensures optimal use of people, money and other resources. In short, it is the art of optimizing assets and lift the value of a portfolio.
The portfolio management is the case of a management team of the company. They are sometimes called “product committee”. Portfolio management provides managers with a better understanding of a business costs, risks and capabilities. The portfolio management effort must be aligned with the strategy of the organization of the company. The result is evaluated using performance measures. Managing the management of the business portfolio and the management of the project portfolio are the main types of portfolio management. The management of the enterprise portfolio uses the selection of investments according to the needs and value of the company, as settled by the enterprise architecture. The management of the project portfolio uses a structured approach to get decisions about a set of portfolios.
The asset allocation decision is an important part of any portfolio management program. The asset allocation decides which proportions of a portfolio will be invested in various asset classes. The asset allocation is two – active and passive types. The active allocation of assets is based on market views.
Portfolio management is a practical tool for making planned decisions and determining costs. It also helps investment bankers consolidating investments in various categories, including stocks of blue flea, mutual funds and bonds. Effective portfolio management promotes the growth of organizations and other commercial establishments. It helps organize the necessary resources and produce maximum turnover. Portfolio management links activities, resources and policies.
Many professional portfolio management programs are available for individual and institutional investors. Using a profiling process of extended clients, they help the customer discover the most appropriate allocation and investment plan.