Portfolio management refers to the process of managing a collection of investments, such as stocks, bonds, mutual funds, and other securities, to achieve an individual's or organization's financial goals and objectives. It involves:
1. Assessing investment objectives and risk tolerance
2. Creating a diversified investment portfolio
3. Setting a strategic asset allocation
4. Selecting individual securities or investment products
5. Monitoring and adjusting the portfolio as needed
6. Rebalancing the portfolio to maintain its original asset allocation
7. Managing risk and tax implications
Effective portfolio management aims to:
- Maximize returns
- Minimize risk
- Ensure consistent performance
- Align with investor goals and values
