Student Name:

Student ID:
Subject RE: Portfolio Management
Dear Mr. John McLean,
Markowitz's Portfolio Model, in simple terms, puts in place the considerations of the
investor. In this portfolio, the investor must consider two concerns when building an investment.
These include the risk associated and the expected return. The investors mostly accumulate an
asset portfolio that maximizes the anticipated profit. The expected returns in this portfolio are
always higher for a risk taken.
The Markowitz Portfolio model incorporates investment risk and returns characteristics
that should be viewed separately. An investor in this kind of selection can accumulate many
assets that yield most of the yields. An investor can also opt to dive into the lowest level of risk.
According to Markowitz Portfolio Model, investors tend to favor a less risky portfolio to a risky
one for a given level of return. A four asset portfolio threat is must bear all the four assets,
adjustment, and six correlational digits.
Markowitz's Portfolio model has shown how investors view risks. Losses cannot
significantly impact the market. This is so because of diversification. Performance cannot be
spoiled.

The Markowitz Portfolio Model is of importance since it can reduce volatility in the
market. They create efficient portfolios possible.
The choice of whether risky commodities should be sold or bought depends on the
understanding of the risk profile of an individual. Financial behavior and Psychology, in this
case, play a crucial role in this. An aggressive risk profile will mean that even if the markets fall,
one will remain invested. Even if there is a 10% short-term fall in the market, that won't matter.
Of critical status is the understanding of risk in the portfolio. When stocks are not directly
related, the associated risks will be lower. A good example is seen in a portfolio with two risky
stocks. Each portfolio is subjected to a specific prevailing condition such as rain and sunshine.
Each portfolio will pay off depending on the general situation it is subjected to. A portfolio that
has both assets will pay off regardless of the conditions it is subjected to.
To sum this up, the portfolio proves that when one makes the right decision and chooses
the right combination, one can amass as many benefits as possible. The concentration will be on
stocks and how one chooses their correct combination. Thus, one should not be afraid to buy
hazardous stocks or even sell them as the overall portfolio risk is affected by the difference in
each stock level of risk.

Kind Regards
[Your name]