Portfolio management - Term Paper Example

Comments (0) Cite this document
The process of portfolio construction is normally designed to make sure that the allocations to managers and investment strategies are consistent with the risk and return goals of the portfolio. Thus portfolio construction is basically a personalized, disciplined procedure. In…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.1% of users find it useful
Portfolio management
Read TextPreview

Extract of sample
"Portfolio management"

Download file to see previous pages Generally, it is believed that the beginning of portfolio construction started in 1952 after the Portfolio Selection hypothesis of Harry Markowitz was published. This is the theory that introduced Modern Portfolio Theory to the world and offered a framework intended to maximize returns at a certain volatility level, described as the standard deviation of returns. Currently, an amalgamation of various theories forms the foundation for the process of investment consulting. It is this process of investment consulting that formalizes investing and develops a blue print for constructing one’s portfolio. Thus, the investor’s Financial Advisor must develop a blueprint for the investor on the basis of his/her needs and objectives, investment parameters as well as long-term asset allocation approach (McMillan & Pinto, 2011).
After the strategic asset allocation has been developed, then, portfolio construction can start. As an aspect of the process of portfolio construction, investment options should be assessed not in seclusion but as complements to one another and as important elements of a bigger whole. When constructed suitably, the entire portfolio must minimize single-manager risk while at the same time looking to make the most of portfolio-wide returns, which is facilitated by combining managers that display low historical correlation in addition to exhibiting different behaviors in various market environments. There are four vital steps in portfolio construction which include determination of objectives and goals, asset allocation, searching and selection of a manager and performance monitoring. The first step is determination of investment parameters and involves cash flow requirements, risk tolerance of the investor, performance objectives, investment restrictions and time horizon. The second step is definition of investment strategy and consists of formulation of policy statement, risk optimization/reward ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Portfolio management Term Paper Example | Topics and Well Written Essays - 500 words”, n.d.)
Portfolio management Term Paper Example | Topics and Well Written Essays - 500 words. Retrieved from https://studentshare.org/finance-accounting/1695494-portfolio-management
(Portfolio Management Term Paper Example | Topics and Well Written Essays - 500 Words)
Portfolio Management Term Paper Example | Topics and Well Written Essays - 500 Words. https://studentshare.org/finance-accounting/1695494-portfolio-management.
“Portfolio Management Term Paper Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/finance-accounting/1695494-portfolio-management.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
Portfolio management
...? Portfolio Management Introduction Portfolio management is a professional management field in the investment of stocks, securities and other investments aimed at taking optimal decision required to meet the desired returns that an investor aims to achieve. Investment in shares inherently contains market risk associated with them. The risk associated with some securities may be high whereas the risk associated in other securities may be low. By measuring the volatility of the price of stocks and securities, the associated risk with an investment may be determined. Investors are normally risk averse in nature. This means that the investors incline towards...
6 Pages(1500 words)Research Paper
Portfolio Management
...? Portfolio Management Contents Portfolio: alternative investment strategies 3 Diversification 3 Non-correlating assets 3 Leap Puts and other Option 4 Stop Losses 4 Dividends 5 Principal protected investments 5 Role of modern portfolio theory in investment strategies 5 References 7 Portfolio: alternative investment strategies The formation of a portfolio is done by combining assets of different categories in order to meet the investment goals of an investor. The portfolio formation is characterized by the attainment of optimal returns and diversification of risk. The main strategy in the formation of...
4 Pages(1000 words)Essay
Portfolio Management
...? Efficient Market Theories According To Warren Buffett Weaknesses of the Efficient Market Theory Anyone who invests in the stock market expects to have a return on the principal invested. Assuming that the efficient market way of thinking is correct, then no individual, group or organization can ever expect to outperform the stock market, except by random chance. This is because no one is privy to information that is unavailable to everyone else. Similarly, none of the above mentioned could expect to benefit from the market consistently. How then has Warren Buffett managed to get on the right side of random chance consistently for years? This obviously shows that this theory is not entirely correct. The theory further...
3 Pages(750 words)Essay
Portfolio management
...Portfolio management Introduction An investor may hold a collection of investments to derive future payments that will compensate the investor for the time the funds are committed, the expected rate of inflation, and the uncertainty of the future payments. The "investor" can be an individual, a government, a pension fund, or a corporation. The most vital decision regarding investing that an investor can make involves the amount of risk he or she is willing to bear. Most investors will want to obtain the highest return for the lowest amount of possible risk. However, there tends to be a trade-off between risk and return, whereby larger returns are generally associated with larger risk....
7 Pages(1750 words)Essay
Portfolio Management
...Running Head: Portfolio Management Portfolio Management of the of the Portfolio Management Introduction Managers make investment decisions based upon their personal abilities and risk preferences. This paper models a simultaneous system for a large sample f mutual fund managers in order to determine the effects that human capital characteristics have on fund return performance, risk and fees. That fund managers' characteristics simultaneously determine their portfolio return performance and risk as well as their own compensation is not surprising; yet, earlier studies...
21 Pages(5250 words)Essay
Portfolio Management,
... of Warwick, June 2006 Albert J. Fredman and Russ wiles, "How mutual funds works", first edition, prenticehall of India private limited, New Delhi, 1997. William F. Sharpe - Gordon J. Alexander, Jeffery V. Bailey, Investments, Prentice Hall of India, sixth edition Donald E. Fischer, Ronald J. Jordan, Security Analysis and Portfolio management, Prentice Hall of India, Sixth Edition www.moneycontrol.com... talks about the investment option of a venture capitalist. It provides details of investments in various countries for a period of seven years and advises the manager in taking up an investment decision. The colours in the chart are used appropriately and the chart is easy to read. In the chart, real numbers have been used...
4 Pages(1000 words)Research Paper
Portfolio management
...increased sharply in 2013. Similarly the company is also expending on intangibles which reveals the dynamic vision of the management towards development. However the increase of property and intangible has been made possible by compromising on the percentage share of long term assets which included investments. This indicates that the company is more focused on expanding its core operations rather than just diversifying its investments’ portfolio. As a result of market expectations, the P/E ratio of the company is 13.36. (QEWC Summary). This shows that investors are anticipating high returns from the company depending upon its past performance and forecasts. Forecast Income Statement for 2014 and...
15 Pages(3750 words)Essay
Portfolio management
...Portfolio management Portfolio management This is a process carried out to ensure that the organisation spends its scarce resources on the work that is of most value. Practicing portfolio management in the organisation helps in ensuring that only the most valuable work is approved and managed across the entire organisation. Portfolio management implies that you manage your money in a manner that maximises the organisation’s returns and minimises risks. Portfolio managements involve understanding the various investment alternatives and...
8 Pages(2000 words)Essay
Portfolio management
...Statistics Project, Finance and Accounting Portfolio Management Introduction This study is an analysis of the performance of a selected set of stocks for a period of 20 years between 1994 and 2014. The objective of the study is to measure the relationship between the risks in the investments and the expected return. Many models and methods are applied in this study to maximize the return and minimize the risks in the investments. The study assists in the selection of the most efficient method for optimizing the portfolio. The optional methods available include the Classical Mean-Variance, the robust optimization and the Treynor-Black, and the different input parameter for estimation of...
9 Pages(2250 words)Statistics Project
Portfolio management
...PORTFOLIO MANAGEMENT School (please tick one) Business School  Law School Programme BSc Examination Portfolio Management I am not aware of any medical or other extenuating circumstances that would impair my performance in this examination Signature …………………………………….. Question 1 a. The five companies selected that are quoted on the London Stock Exchange are; Criteria Company 1 2 3 4 5 6 7 8 9 F-Score Price to book 1 BAT 1 1 1 1 0 1 1 1 1 8 0.8 2 BP 1 1 1 1 1 0 1 1 1 8 0.9 3 HSBC 1 1 1 1 0 1 1 1 1 8 0.6 4 Barclays 1 1 1 1 1 0 1 1 1 8 0.8 5 OM Inc. 1 1 1 1 1 0 1 1 1 8 0.6 An overview of the quoted companies BAT It is a major producer of cigarettes worldwide. BAT has...
8 Pages(2000 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Term Paper on topic Portfolio management for FREE!
Contact Us