Portfolio Selection for investment

What factors to consider for building a portfolio for investment?

 The Portfolio perspective refers to evaluating

individual investments by their contribution to the risk and returns of an investments portfolio.
If we invest in a single asset class then the risk

will be more so if we create set of asset classes which are diversified then risk will be reduced.

Steps in the portfolio managements process

Planning step (Investment policy statement

creation)
Execution step (Analysis of asset classes)
Feedback step (rebalance of portfolio

periodically)

Planning step
Collect the detailed information about investment constraints from the investor
Investment period Liquidity Tax situation Unique circumstances

Execution step
Select the asset classes which are satisfying with

the investors constraints based on technical analysis of past data

Out of the shortlisted asset classes the choose

the asset classes most consistent in their return

Feedback step
Monitor and rebalance the portfolio to adjust class

allocation after each time period

Measure and report the performance of the

portfolio regularly