CHAPTER :1 INTRODUCTION

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1 INTRODUCTION OF PORTFOLIO MANAGEMENT OF
INVESTMENTS.
Portfolio management is the process of managing a collection of investments, known as a
portfolio, with the goal of maximizing returns while minimizing risk. The investment
portfolio can consist of various types of assets, including stocks, bonds, mutual funds, real
estate, and other alternative investments.The objective of portfolio management is to create a
diversified investment portfolio that aligns with the investor's goals, risk tolerance, and time
horizon. Diversification is achieved by investing in different asset classes and securities,
which reduces the overall risk of the portfolio.Portfolio managers use various strategies to
manage the portfolio, such as asset allocation, security selection, and market timing.
Asset allocation refers to the process of dividing the portfolio among different asset classes
based on the investor's risk tolerance and financial goals. Security selection involves selecting
individual securities within each asset class, with the goal of outperforming the market.
Market timing refers to making investment decisions based on market trends and economic
conditions.Investors can hire professional portfolio managers or manage their portfolio
themselves. Professional portfolio managers may work for investment firms, banks, or other
financial institutions. Self-managed portfolios are often managed by individual investors or
investment clubs.Effective portfolio management can help investors achieve their financial
goals while minimizing risk. However, it is important to remember that no investment
strategy is foolproof, and all investments come with some level of risk.

Therefore, it is important for investors to educate themselves about the risks and
benefits of different investment strategies and to consult with a financial advisor before
making investment decisions

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1.1 DEFINITIONS

"An individual who purchases small amounts of securities for themselves, as opposed to an
institutional investor, also called as Retail Investor or Small Investor."

"A portfolio investment is a passive investment in the form of group; by individuals, firms or
public organizations in the financial instruments such as financial assets,equity securities,
bonds and stocks within a country or outside the country.”

MEANING: A retail investor, also known as a small investor, is an individual who purchases
securities for their own personal investment, as opposed to an institutional investor who
invests on behalf of an organization or group of individuals. Retail investors typically invest
smaller amounts of money than institutional investors, and may not have the same level of
access to investment opportunities or resources.
Retail investors may invest in a variety of securities, such as stocks, bonds, mutual funds,
exchange-traded funds (ETFs), or other types of investment products. They may also invest
directly in companies through initial public offerings (IPOs) or crowdfunding platforms.
One of the key characteristics of retail investors is that they make investment decisions based
on their own personal research and analysis, rather than relying on the advice or
recommendations of financial advisors or institutional investors. This means that they may be
more susceptible to emotional biases and may make investment decisions based on short-term
market fluctuations or news events.

Despite these challenges, retail investors play a vital role in the financial markets, providing
liquidity and contributing to market efficiency. They also have the potential to benefit from
long-term investment strategies and can achieve significant wealth creation over time.

Overall, retail investors are individual investors who purchase small amounts of securities for
themselves. They may face certain challenges when investing, but they play an important role
in the financial markets and can benefit from long-term investment strategies.

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1.2 HISTORICAL BACKGROUND OF PORTFOLIO MANAGEMENT
OF INVESTMENTS.

The concept of portfolio management can be traced back to the work of Harry Markowitz,
who is widely considered the father of modern portfolio theory. In 1952, Markowitz
published a paper titled "Portfolio Selection" in the Journal of Finance, which laid the
foundation for modern portfolio management.

Markowitz's work focused on the idea of diversification and the importance of asset
allocation in managing investment portfolios. He introduced the concept of "efficient
frontier," which refers to the set of optimal portfolios that offer the highest expected return
for a given level of risk.
Over the years, other researchers and practitioners have built upon Markowitz's work and
developed various portfolio management strategies. In the 1960s and 1970s, William Sharpe,
John Lintner, and Jan Mossin developed the Capital Asset Pricing Model (CAPM), which
provided a framework for understanding the relationship between risk and return.
In the 1980s and 1990s, practitioners began to focus on quantitative portfolio management,
which involves using mathematical models and algorithms to make investment decisions.
This approach has become increasingly popular in recent years, as advances in technology
have made it easier to collect and analyze large amounts of data.

Today, portfolio management is an essential part of the investment management industry, and
it is used by individuals, institutional investors, and financial advisors to manage a wide
range of investment portfolios. The field continues to evolve, as new research and technology
lead to the development of new portfolio management strategies and techniques.

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1.3 MEANING OF INVESTMENT

Investment is the act of committing money or resources to an asset or venture with the
expectation of obtaining an income or profit, or to gain some other form of benefit, such as
capital appreciation or increased value over time. It involves setting aside funds or resources
with the goal of generating a return or achieving a specific financial objective, such as
building wealth or saving for retirement. The asset or venture that is invested in can take
many forms, including stocks, bonds, real estate, businesses, commodities, or other
alternative investments.

Investment of hard earned money is a crucial activity of every human being. Investment is the
commitment of funds which have been saved from current consumption with the hope that
some benefits will be received in future. Thus, it is a reward for waiting for money. Savings
of the people are invested in assets depending
on their risk and return demands. Investment refers to the concept of deferred consumption,
which involves purchasing an asset, giving a loan or keeping funds in a bank account with the
aim of generating future returns. Various investment options are available, offering differing
risk-reward tradeoffs. An understanding of the core concepts and a thorough analysis of the
options can help an investor create a portfolio that maximizes returns while minimizing risk
exposure.

There are Two concepts of Investments:

1. Financial investment: Financial investment is when someone puts their money into
things like stocks, bonds, or real estate with the expectation of making a profit or earning
some other form of return over time. It usually involves buying paper assets like stocks
or bonds that represent ownership in a company or a loan made to a company or
government. People may also invest in things like fixed deposits, insurance policies, and
pension funds to earn returns on their investment. The goal of financial investment is to
generate income in the form of interest, dividends, or capital appreciation. Financial

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 investment is more common in modern economies compared to traditional economies,
where most investments are made in tangible assets like land or livestock.

2. Economic investment: Economic investment refers to the process of adding more

goods that are used to produce other goods and services in society. These goods are
known as the capital stock. Investment involves creating new and productive assets, such
as building new factories, buying new machines and equipment, and increasing inventory
levels. It also includes investing in human capital, which means improving the skills,
knowledge, and abilities of the workforce. In other words, economic investment means
increasing the resources and tools available to produce goods and services, which can
lead to economic growth and development.

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1.4 TYPES OF INVESTMENT

There are many different ways to invest your money in India. These are called investment
avenues. There are two main types of investment avenues: financial assets and real assets.
Financial assets are things like shares, government securities, and mutual funds. Real assets
are things like houses, property, and gold. Investors can choose which investment avenue is
best for them based on their needs. All investors want their money to be safe, easy to access,
and to earn a good return. There are many investment options available in India, like mutual
funds, corporate securities, and public provident fund. However, investors should be careful
when investing their money and research their options before making a decision.

1) Shares
2) Debentures and Bonds.
3) Public Deposits
4) Bank Deposits
5) Post Office Savings
6) Public Provident Fund (PPF)
7) Money Market Instruments
8) Mutual Fund Schemes
9) Life Insurance Schemes
10) Real Estates
11) Gold-Silver
12) Derivative Instruments
13) Commodity Market (commodities)

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For sensible investing, investors should be familiar with the characteristics and features of
various investment alternatives. These are the various investment avenues; where individual
investors can invest their hard earn money.

1. SHARES: Shares are a type of financial asset that represents a portion of ownership
in a company. When you buy shares, you become a shareholder in that company and
have a claim on a portion of its assets and earnings. Shares are bought and sold on
stock exchanges, and the price of a share can go up or down depending on a variety of
factors like the company's financial performance and market conditions. Shareholders
may also receive dividends, which are a portion of the company's profits paid out to
shareholders. Owning shares can be a way to invest in the success of a company and
potentially earn a return on your investment.

2. DEBENTURES AND BOND: Debentures and bonds are types of debt instruments
issued by companies to raise funds from investors. They work by borrowing money
from investors, who receive regular interest payments and the return of their principal
investment at a specified maturity date. Debentures are unsecured debt instruments,
meaning they do not have any collateral backing them, while bonds can be secured by
assets such as property or equipment. Both debentures and bonds are usually traded
on bond markets, and their prices can be affected by factors such as interest rates and
the creditworthiness of the issuer.

3. PUBLIC DEPOSITS: Public deposits refer to the fixed deposits made by individuals
or entities in non-banking financial institutions or companies for a fixed period of
time, typically ranging from 1 to 5 years. Public deposits offer higher interest rates
compared to traditional bank deposits, making them an attractive investment option
for conservative investors.Public deposits can be either cumulative or non-cumulative.
In a cumulative deposit, the interest is compounded annually and paid along with the
principal at the time of maturity. In a non-cumulative deposit, the interest is paid out
periodically, typically on a monthly, quarterly, or half-yearly basis.

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4. BANK DEPOSITS: Bank deposits refer to the funds that are deposited by
individuals, companies, and other entities in banks. The bank acts as a custodian of
the deposited funds and in return, provides interest on the deposits. The two most
common types of bank deposits are savings accounts and fixed deposits.Savings
accounts offer a low rate of interest but provide easy liquidity, which means that the
deposited funds can be withdrawn at any time. The depositor can deposit and
withdraw funds as per their requirement. There may be a limit on the number of
withdrawals allowed in a particular period

5. POST OFFICE SAVINGS: Post Office Savings is a government-backed savings

scheme available in India. It offers various savings and investment options such as
savings accounts, recurring deposits, time deposits, and public provident fund (PPF).
The scheme is popular among small savers in India, especially in rural areas where
banking facilities are limited. Post Office Savings accounts and deposits offer
competitive interest rates and tax benefits, making them an attractive investment
option for conservative investors. The scheme is backed by the Government of India,
providing a sense of security to the investors. The investments made in post office
savings schemes are also eligible for deductions under Section 80C of the Income Tax
Act.

6. PUBLIC PROVIDENT FUND(PPF): Public Provident Fund (PPF) is a long-term

saving and investment scheme backed by the Government of India. It is considered as
one of the safest and most tax-efficient investment options available to Indian citizens.
The scheme was introduced in 1968 to promote savings among Indians and encourage
retirement planning.PPF accounts can be opened at designated post offices or banks
and have a maturity period of 15 years. The minimum deposit required to open a PPF
account is Rs. 500, and the maximum deposit allowed in a financial year is Rs. 1.5
lakhs. Deposits can be made in a lump sum or in installments not exceeding 12 in a
financial year

7. MONEY MARKET INSTRUMENTS: Money Market Instruments refer to short-

term debt securities with a maturity period of up to one year. These instruments are
issued by governments, banks, corporations, and other financial institutions to raise
short-term funds. Some common examples of money market instruments are treasury

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 bills, commercial papers, certificates of deposit, and repurchase agreements.Treasury
bills (T-bills) are issued by the government to raise short-term funds for its operations.
They have a maturity period of up to one year and are issued at a discount to their face
value.Commercial papers are unsecured promissory notes issued by corporations to
raise short-term funds. They have a maturity period of up to one year and are typically
issued at a discount to their face value.

8. MUTUAL FUNDS: Mutual funds are investment vehicles that pool money from
various investors and invest them in a diversified portfolio of securities such as stocks,
bonds, money market instruments, and other assets. These funds are managed by
professional fund managers who buy and sell securities on behalf of investors to
achieve the fund's objectives.Mutual funds offer several advantages to investors, such
as professional management, diversification, liquidity, convenience, and affordability.
There are different types of mutual funds, including equity funds, debt funds, hybrid
funds, sector funds, and index funds. Each type of fund has its own investment
objective, risk profile, and return potential.

9. LIFE INSURANCE SCHEMES: Life insurance schemes are financial products that
provide a lump sum payment to the beneficiary or beneficiaries of a policyholder
upon the death of the policyholder. The main purpose of life insurance is to provide
financial security and support to the loved ones of the policyholder in case of an
unexpected or untimely death.

10. REAL ESTATE : Real estate refers to property that consists of land and any
buildings or structures on it. Real estate can be residential, commercial, or industrial,
and it can include everything from single-family homes to large office buildings,
shopping centers, and factories. Investing in real estate can be a lucrative venture, as it
offers the potential for appreciation in property value and rental income.

11. GOLD AND SLIVER:Gold and silver are precious metals that have been used as
forms of currency and stores of value for thousands of years. Both gold and silver
have a number of unique properties that make them valuable, including their rarity,

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 durability, and resistance to corrosion.Investing in gold and silver can be a way to
diversify a portfolio and provide a hedge against inflation and economic uncertainty.
Some common ways to invest in gold and silver include:

• Buying physical bullion: This involves purchasing gold or silver bars, coins, or other
forms of physical metal. This can be done through a dealer or broker, but investors
should be aware of issues such as storage and transportation.

• Exchange-Traded Funds (ETFs): Gold and silver ETFs are funds that hold a portfolio
of physical metal and are traded on stock exchanges like stocks. This provides
investors with exposure to the price of gold or silver without the need to physically
hold the metal.

• Mining stocks: Investors can also invest in gold and silver mining companies, which
can provide exposure to the price of the metals as well as potential profits from
mining operations.

• Futures contracts: Futures contracts allow investors to buy or sell gold or silver at a
specific price at a future date. This can be a more speculative investment strategy and
may involve higher risks.

12. DERIVATIVES INSTRUMENTS: Derivative instruments are financial contracts

that derive their value from an underlying asset or group of assets, such as stocks,
bonds, commodities, currencies, or interest rates. These instruments can be used to
hedge against risk or to speculate on the future value of the underlying asset.

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There are many types of derivative instruments, including:

• Futures contracts: An agreement to buy or sell an underlying asset at a predetermined

price and date.

• Options contracts: A contract that gives the holder the right, but not the obligation, to
buy or sell an underlying asset at a predetermined price and date.

• Swaps: An agreement between two parties to exchange cash flows based on different
interest rates, currencies, or other financial variables.

• Forwards: A contract to buy or sell an asset at a predetermined price on a future date.

• Credit default swaps (CDS): A contract that provides insurance against the default of
a particular asset.

13.COMMODITY MARKET: commodity market is a financial market where raw materials

and primary products are traded. These commodities can include agricultural products like
wheat, corn, and soybeans, energy products like crude oil and natural gas, metals like gold
and silver, and other commodities like cotton and sugar.The commodity market is divided
into two major categories: the spot market and the futures market. In the spot market,
commodities are traded for immediate delivery or payment, while in the futures market,
commodities are traded for future delivery or payment.

HOW DOES PORTFOLIO MANAGEMENT WORKS:

Portfolio management is the process of managing an investment portfolio in a systematic and

organized manner to achieve the investor's financial goals and objectives. The process
involves a number of steps, starting with defining the investment objectives, which sets the
framework for the entire portfolio management process. The investor's risk tolerance,
investment horizon, and other factors are taken into consideration in determining the
investment objectives.

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Once the investment objectives are established, the portfolio is then allocated across various
asset classes, such as stocks, bonds, and cash, based on the investor's risk tolerance and
investment goals. This is known as asset allocation, and it is a critical component of portfolio
management as it helps to optimize the portfolio's performance while minimizing risk.
After the asset allocation is determined, the portfolio manager then selects specific securities
within each asset class, based on various criteria such as market trends, company
fundamentals, and other factors. This is known as security selection, and it helps to ensure
that the portfolio is positioned to achieve the desired returns over the long term.

The portfolio manager then continuously monitors the performance of the portfolio and
makes adjustments as necessary to ensure that it remains aligned with the investor's
investment objectives and risk tolerance. This may involve rebalancing the portfolio to
maintain the desired asset allocation or adjusting the security selection to account for
changing market conditions

BASIC TERMS:

There are several basic terms associated with portfolio management of investments that
investors should be familiar with, including:

Asset allocation: The process of dividing an investment portfolio among different asset
categories, such as stocks, bonds, and cash, based on the investor's investment objectives and
risk tolerance.

Diversification: The strategy of spreading investments across multiple assets to reduce the
risk of loss from any single investment. This can be achieved through investing in different
asset classes, industries, and geographic regions.

Risk tolerance: The level of risk that an investor is comfortable taking on in their portfolio.
This is influenced by factors such as age, financial goals, and investment horizon.

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Portfolio rebalancing: The process of adjusting the portfolio to maintain the desired asset
allocation over time. This involves selling or buying assets to bring the portfolio back into
balance.

Investment horizon: The length of time that an investor plans to hold an investment. This is
an important factor in determining the appropriate asset allocation and investment strategy.

Return on investment (ROI): The profit or loss generated by an investment relative to the
amount of money invested. ROI is typically expressed as a percentage.

Portfolio performance: The overall return of an investment portfolio over a given period of
time. This is measured using various metrics, including ROI and benchmark comparisons.

Liquidity: The ease with which an investment can be bought or sold in the market without
affecting its price. Highly liquid assets are easy to sell, while less liquid assets may take
longer to sell and may be subject to price fluctuations.

Understanding these basic terms is essential for effective portfolio management and can help
investors make informed decisions about their investments.

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1.5 TYPES OF PORTFOLIO MANAGEMENT OF INVESTMENTS :

Active portfolio management: This approach involves a portfolio manager actively making
investment decisions in an attempt to outperform the market. The manager will research and
analyze market trends, company fundamentals, and other factors to identify potential
investments that they believe will perform well. They may also actively manage the portfolio
by buying and selling securities on a regular basis. The goal is to generate higher returns than
the market average, but this approach often comes with higher fees and greater risk.

Passive portfolio management: This approach seeks to replicate the performance of a

specific benchmark index, such as the S&P 500. Instead of actively managing the portfolio,
the manager will invest in a diversified set of securities that closely mirror the holdings of the
index. This approach is often characterized by lower fees and less frequent trading, but it may
also result in lower returns.

Strategic portfolio management: This approach involves creating a long-term investment

plan that is aligned with the investor's financial goals and risk tolerance. The portfolio
manager will create a diversified mix of assets that are designed to perform well over the
investor's desired investment horizon. The portfolio is periodically rebalanced to ensure that
it remains aligned with the investor's goals and risk tolerance.

Tactical portfolio management: This approach involves making short-term adjustments to

the portfolio in response to changing market conditions. The portfolio manager may increase
or decrease exposure to certain asset classes or securities in an effort to capitalize on market

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opportunities. The goal is to generate higher returns by taking advantage of market
inefficiencies, but this approach can also result in greater volatility.

Dynamic portfolio management: This approach is similar to tactical portfolio management

but involves more frequent adjustments to the portfolio in response to market changes. The
portfolio manager may use a variety of quantitative models and tools to make investment
decisions in real-time. This approach is often used by hedge funds and other sophisticated
investors who are seeking to generate high returns.

1.6 IMPORTANCE OF PORTFOLIO MANAGEMENT.

Portfolio management is important for several reasons:

⚫ Diversification: By investing in a range of different assets, portfolio management helps

to spread risk and reduce the impact of individual asset fluctuations on the overall
portfolio. Diversification can help to minimize losses and enhance returns.

⚫ Risk management: Portfolio management helps investors to identify and manage risks
associated with their investments. It involves evaluating the risk-return tradeoff of
different assets and selecting those that are best suited to the investor's risk tolerance and
investment objectives.

⚫ Maximizing returns: By carefully selecting and managing investments, portfolio

management can help investors to maximize their returns over time. This involves
regularly monitoring the performance of the portfolio and making adjustments as
necessary.

⚫ Tax efficiency: Portfolio management can also help to optimize tax efficiency by taking
advantage of tax-saving strategies, such as tax-loss harvesting and asset location.

⚫ Meeting financial goals: Portfolio management is important for helping investors to

meet their financial goals, whether that is saving for retirement, paying for college, or
achieving other long-term financial objectives. By carefully managing investments,

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 investors can work towards achieving their goals while minimizing risk and maximizing
returns.

Overall, portfolio management is essential for ensuring that investments are well-managed,
diversified, and aligned with the investor's goals and objectives. It helps to minimize risk,
maximize returns, and achieve long-term financial success.

WHO IS PORTFOLIO MANAGER

a. An individual who understands the client’s financial needs and designs a suitable
investment plan as per his income and risk taking abilities is called a portfolio manager.

b. A portfolio manager is one who invests on behalf of the client. A portfolio manager
counsels the clients and advises him the best possible investment plan which would guarantee
maximum returns to the individual.

c. A portfolio manager must understand the client’s financial goals and objectives and offer a
tailor made investment solution to him. No two clients can have the same financial needs.

1.7 BASIC PRINCIPLES OF PORTFOLIO MANAGEMENT IN

INVESTMENT:

There are two basic principles for effective portfolio management which are given below:

I. Effective investment planning for the investment in securities by considering the

following factors.

a) Fiscal, financial and monetary policies of the Govt. of India and the Reserve Bank of India.
b) Industrial and economic environment and its impact on industry. Prospect in terms of
prospective technological changes, competition in the market, capacity utilization with
industry

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and demand prospects etc.

II. Constant Review of Investment: It requires to review the investment in securities and
to continue the selling and purchasing of investment in more profitable manner. For
this purpose they have to carry the following analysis:

a) To assess the quality of the management of the companies in which investment has been
made or proposed to be made.

b) To assess the financial and trend analysis of companies Balance Sheet and Profit and Loss
Accounts to identify the optimum capital structure and better performance for the purpose of
withholding the investment from poor companies.

c) To analyze the security market and its trend in continuous basis to arrive at a conclusion as
to whether the securities already in possession should be disinvested and new securities be
purchased. If so the timing for investment or dis-investment is also revealed.

1.8 CHARACTERISTICS OF PORTFOLIO MANAGEMENT:

The characteristics of portfolio management in investment include:

1. Diversification: Portfolio management involves investing in a diversified range of assets

to spread risk and minimize the impact of individual asset fluctuations on the overall
portfolio.

2. Risk management: Portfolio managers use various risk management techniques, such as
hedging and diversification, to protect portfolios against market volatility and manage
risk.

3. Active management: Portfolio management involves active management of investments,

with portfolio managers regularly monitoring and evaluating the performance of
investments and making adjustments as necessary to achieve investment objectives.

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4. Customization: Portfolio management allows investors to customize their investments
based on their individual needs and preferences, selecting from a range of investment
options and strategies to create a portfolio that is tailored to their specific goals and risk
tolerance.

5. Professional expertise: Portfolio managers have the knowledge, experience, and

expertise to make informed investment decisions and manage portfolios effectively, with
access to research, data, and analysis that individual investors may not have.

6. Long-term focus: Portfolio management involves a long-term focus on achieving

investment objectives, with portfolio managers developing investment strategies and
making investment decisions based on a long-term investment horizon.

7. Discipline: Portfolio management involves a disciplined approach to investing, with

portfolio managers adhering to an investment strategy and process that is designed to
achieve investment objectives.

8. Flexibility: Portfolio management allows for flexibility in investment decisions and

strategies, with portfolio managers able to adjust the portfolio as needed to respond to
changing market conditions and investment opportunities.

9. Transparency: Portfolio management involves transparency in investment decision-

making and portfolio performance, with portfolio managers providing regular reporting
and updates to investors.

10. Accountability: Portfolio management involves accountability for investment decisions

and portfolio performance, with portfolio managers held accountable for achieving
investment objectives and providing value to investors.

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1.9 ADVANTAGES OF PORTFOLIO MANAGEMENT :

⚫ Diversification: Portfolio management allows for diversification of investments, which

helps to reduce risk and protect against market volatility.

⚫ Professional expertise: Portfolio managers have the knowledge, experience, and

expertise to make informed investment decisions, helping to achieve better returns than
individual investors.

⚫ Active management: Portfolio managers monitor and evaluate the performance of

investments regularly and make adjustments as necessary to achieve investment
objectives.

⚫ Customization: Portfolio management allows investors to create a portfolio that is

tailored to their specific needs and preferences, including risk tolerance, investment goals,
and time horizon.

⚫ Risk management: Portfolio managers use various risk management techniques, such as
hedging and diversification, to manage risk and protect portfolios against market
volatility.

⚫ Cost-effective: Portfolio management can be cost-effective for individual investors, as

they can benefit from the economies of scale and access to institutional pricing for
investments.

⚫ Transparency: Portfolio managers provide regular reporting and updates to investors,

ensuring transparency in investment decision-making and portfolio performance.

⚫ Long-term focus: Portfolio management involves a long-term focus on achieving

investment objectives, helping to avoid short-term market fluctuations and volatility.

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⚫ Flexibility: Portfolio management allows for flexibility in investment decisions and
strategies, with portfolio managers able to adjust the portfolio as needed to respond to
changing market conditions and investment opportunities.

⚫ Accountability: Portfolio managers are held accountable for achieving investment

objectives and providing value to investors, ensuring that they work in the best interests
of their clients.

1.10 DISADVANTAGES OF PORTFOLIO MANAGEMENT IN

INVESTMENT:

⚫ Cost: Portfolio management can be expensive, with fees charged by portfolio managers
and other expenses associated with managing the portfolio.

⚫ Limited control: Investors may have limited control over the investments made by
portfolio managers, which can lead to a lack of transparency and uncertainty about the
portfolio's performance.

⚫ Potential for conflicts of interest: Portfolio managers may have their own interests that
conflict with those of the investor, which can impact investment decisions.

⚫ Over-diversification: Portfolio managers may over-diversify the portfolio, leading to

reduced returns and higher costs.

⚫ Inability to take advantage of short-term opportunities: Portfolio managers may

focus on long-term investment objectives, which can lead to missed opportunities in the
short-term.

⚫ Lack of personalization: Portfolio management may not allow for the same level of
personalization as individual investment decisions, which may not meet the unique needs
and preferences of investors.

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⚫ Potential for underperformance: Despite professional expertise, portfolio managers
may underperform the market or fail to meet investment objectives.

⚫ Dependence on the manager: Investors may become too dependent on the portfolio
manager, leading to a lack of investment knowledge and understanding.

⚫ 1.11 STEPS FOLLOW OF PORTFOLIO MANAGEMENT OF

INVESTMENTS:

Here are the steps followed in portfolio management of investment:

➢ Establish investment objectives: The first step in portfolio management is to establish
clear investment objectives that align with the investor's financial goals, risk tolerance,
and investment horizon. For example, an investor may seek long-term capital
appreciation with a moderate level of risk. The portfolio manager will work with the
investor to determine their specific investment objectives.

➢ Determine asset allocation: Asset allocation is the process of selecting the appropriate
mix of assets such as stocks, bonds, real estate, and cash, based on the investor's
investment objectives and risk tolerance. The portfolio manager will help the investor
determine the optimal mix of assets to achieve their investment objectives.

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➢ Security selection: Once the asset allocation is determined, the portfolio manager selects
specific securities or funds within each asset class to build a diversified portfolio. The
goal is to select securities that are expected to perform well and provide the desired level
of risk exposure. The portfolio manager may use a combination of quantitative and
qualitative analysis to select securities.

➢ Risk management: Risk management involves identifying and managing the various
types of risks associated with the portfolio, such as market risk, interest rate risk, and
credit risk. The portfolio manager will use a variety of techniques to manage risk, such as
diversification, hedging, and asset allocation. The goal is to manage risk in a way that
maximizes returns while minimizing risk.

➢ Monitor and review: The portfolio manager regularly reviews the performance of the
portfolio against established benchmarks and makes adjustments as necessary to
maintain the desired asset allocation and risk exposure. The goal is to ensure that the
portfolio continues to meet the investor's investment objectives over time.

➢ Rebalancing: Rebalancing involves periodically adjusting the portfolio to maintain the

desired asset allocation. For example, if one asset class outperforms the others, the
portfolio may be rebalanced by selling some of the winners and buying more of the
losers to restore the desired balance. The goal is to keep the portfolio in line with the
investor's investment objectives and risk tolerance.

➢ Tax planning: Tax planning involves considering the tax implications of investment
decisions and implementing tax-efficient strategies to minimize taxes and maximize
returns. The portfolio manager will work with the investor to implement tax-efficient
investment strategies, such as tax-loss harvesting and asset location.

➢ Reporting and evaluation: The portfolio manager provides regular reports to the
investor or client on portfolio performance and evaluates the effectiveness of the
investment strategy. the investor's objectives. The goal is to provide the investor with
transparency and accountability regarding their investments.

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1.12 IMPACT OF PORTFOLIO MANAGEMENT IN INVESTMENTS.

Effective portfolio management can have a significant impact on investments, providing a

range of benefits that can help investors achieve their financial goals. One of the most
important impacts of portfolio management is risk management. By diversifying across
different asset classes and securities, portfolio managers can help reduce the overall risk of
the portfolio. This can protect investments against market volatility and downturns, ensuring
that investors receive a consistent return on their investment.Another significant impact of
portfolio management is its ability to generate higher returns. By carefully selecting
investments and rebalancing the portfolio regularly, portfolio managers can optimize the
portfolio's performance and potentially generate higher returns. Effective tax management
strategies can also help maximize after-tax returns, further increasing the impact of portfolio
management on investments. Higher returns can help investors achieve their investment goals
more quickly and can result in greater wealth creation over the long term.
Portfolio management can also help investors achieve their specific investment objectives. By
aligning the portfolio with the investor's goals, portfolio managers can select investments that
provide regular income or long-term growth potential. This can help to ensure that the
investor's objectives are achieved over the long term and can provide a sense of financial
security.

Finally, effective portfolio management can help investors adapt to changing market
conditions. By constantly monitoring the portfolio and adjusting it as necessary, portfolio
managers can respond to changes in the market and take advantage of new opportunities.
This can help investors to stay on track toward achieving their investment goals over the long
term and can help ensure that the portfolio remains relevant and effective.
In summary, effective portfolio management can have a significant impact on investments by
reducing risk, generating higher returns, helping investors achieve their specific investment
objectives, and adapting to changing market conditions. By working with a skilled portfolio
manager, investors can benefit from a more comprehensive investment strategy that
maximizes their returns while reducing their exposure to risk.
Portfolio management refers to the process of managing an investment portfolio by selecting
suitable investment options, balancing risks, maximizing returns, and making changes as

Page no: 24
necessary to meet the goals of the investor. Effective portfolio management can have several
impacts on investments

• Risk management: If the most important impacts of portfolio management is risk

management. Effective portfolio management helps to reduce the overall risk of the
portfolio by diversifying across various asset classes and securities. This means that if
one investment performs poorly, the impact on the overall portfolio is reduced. By
balancing risks, portfolio managers can help to protect the portfolio against market
volatility and downturns.
• Returns: Effective portfolio management can also lead to higher returns. By
selecting suitable investments and rebalancing the portfolio regularly, portfolio
managers can optimize the portfolio's performance and potentially generate higher
returns. Additionally, effective tax management strategies can help to maximize after-
tax returns, further increasing the impact of portfolio management on investments.
• Investor Objectives: Portfolio management can help investors achieve their
specific investment objectives. For example, if an investor has a goal of generating
income, a portfolio manager can select investments that provide regular dividend
payments. Similarly, if an investor has a goal of long-term growth, a portfolio
manager can select investments with a higher potential for capital appreciation
• Adaptability: Effective portfolio management can help investors adapt to changing
market conditions. By constantly monitoring the portfolio and adjusting it as
necessary, portfolio managers can respond to changes in the market and take
advantage of new opportunities.

Page no: 25
CHAPTER 2 : RESREACH AND METHODOLOGY

Page no: 26
2.MEANING OF RESEARCH AND METHODOLOGY:

Research refers to the systematic investigation or inquiry into a particular topic or subject
matter in order to discover new knowledge, solve problems, or make decisions. It involves
the collection, analysis, and interpretation of data or information through a process of inquiry
that is objective, systematic, and rigorous.
Methodology, on the other hand, refers to the overall approach or framework that guides the
research process. It includes the methods, procedures, and techniques that are used to collect
and analyze data or information, as well as the principles and assumptions that underlie these
methods.
In essence, methodology is the strategy or plan of action that researchers use to carry out their
research, while research is the actual process of investigating or studying a particular topic or
subject matter using that methodology.

2.1.OBJECTIVES:
The objective of research is to gain new knowledge or insights about a particular topic or
subject matter, to solve a problem, or to make decisions based on empirical evidence.
Research is conducted with the aim of expanding the existing body of knowledge or to
provide a deeper understanding of a particular phenomenon or issue.
Methodology is important in research as it provides a systematic and structured approach to
investigating a topic. It helps to ensure that the research is conducted in a rigorous and
objective manner, with a clear plan of action that is based on sound principles and
assumptions.

2.2 OBJECTIVES OF PRESENT STUDY:

 To evaluate the effectiveness of different portfolio management strategies in achieving

investment goals and objectives.

 To identify the factors that influence the performance of investment portfolios and the
risks associated with different investment options.

Page no: 27
 To assess the impact of economic, political, and market conditions on portfolio
performance and investment decisions.

 To analyze the role of diversification and asset allocation in portfolio management and
the impact of different investment instruments such as stocks, bonds, and derivatives on
portfolio performance.

 To examine the relationship between portfolio management practices and investment

performance, and identify best practices for maximizing returns and minimizing risks.

 To explore the impact of investor behavior on portfolio management, and the role of
emotions and cognitive biases in investment decision-making.

2.3.METHODOLOGY

The methodology of a study on portfolio management of investments typically involves a

literature review, data collection and analysis, surveys and interviews with industry
professionals, case studies, and simulation analysis. This combination of quantitative and
qualitative research methods aims to identify factors that influence portfolio performance,
assess the impact of different investment strategies and instruments, and provide insights and
recommendations for designing and managing effective investment portfolios that align with
investors' goals and objectives.

◆ Literature Review: A comprehensive review of existing literature on portfolio

management, including academic papers, books, and industry reports. This will provide a
foundation for the study and help identify gaps in knowledge that can be addressed
through primary research.

◆ Data Collection: The collection of relevant data from various sources, such as financial
statements, investment reports, and market data. This data can be used to analyze
portfolio performance, identify trends, and assess the impact of different factors on
investment decisions.

Page no: 28
◆ Data Analysis: Statistical analysis of the collected data to identify patterns, correlations,
and trends in portfolio performance. This can involve regression analysis, correlation
analysis, and other statistical techniques.

◆ Surveys and Interviews: Surveys and interviews with investors, portfolio managers, and
other industry professionals to gain insights into investment decision-making processes
and identify best practices.

◆ Case Studies: The analysis of specific investment portfolios to understand the impact of
different strategies, asset classes, and risk management techniques on portfolio
performance.

◆ Simulation Analysis: The use of simulations to test the effectiveness of different

portfolio management strategies under various market conditions and economic scenarios.

2.4 SOURCES OF DATA COLLECTION:

The study of the project based in both primary and secondary data collection data.

2.5 PRIMARY DATA:

Primary data collected from the concerned peoples and people who already invest there
money by using portfolio management.

2.6 SECONDARY DATA :

The secondary data is collected with the help of different books,internet websites ,
News papers, business magazines.

Page no: 29
2.7 IMPORTANCE OF STUDY .

The study of portfolio management of investments is of significant importance for investors,

financial analysts, and portfolio managers alike. The ability to design and manage an
effective investment portfolio is critical in achieving investment goals, minimizing risks, and
maximizing returns.
Through a study of portfolio management, investors can gain insights into the factors that
impact portfolio performance and develop an understanding of the various investment
strategies and instruments available to them. They can also learn how to diversify their
investments across different asset classes and regions to reduce risks and achieve a more
balanced portfolio.

2.8 SCOPE OF STUDY:

✓ Analyzing different investment strategies.

✓ Identifying the factors that influence portfolio performance.
✓ Assessing the impact of economic and market conditions on portfolio management.
✓ Examining the role of diversification and asset allocation in portfolio management.
✓ Identifying the risks associated with different investment options.
✓ Providing insights and recommendations for designing and managing effective
investment portfolios.

2.9 AREA OF STUDY

The data is collected from Ulhasnagar city in Thsne district, Maharashtra ,India.
The city has largest business market and investment lines. Therefore, the study of the
Research become relevant.

2.10 LIMITATIONS OF THE RESEARCH

⚫ Due to lack of time only 30 respodents and that does not gives true picture of the
Benefits of the portfolio management of investments.

⚫ The study is confined to Ulhasnagar city only.

Page no: 30
CHAPTER 3: REVIEW OF LITERATURE

Page no: 31
1: REVIEW OF LITERATURE

A review of literature is a critical analysis and evaluation of existing research studies, articles,
books, and other scholarly works that are relevant to a particular research topic or question. It
involves summarizing, synthesizing, and analyzing the content of the literature to identify
gaps, inconsistencies, and areas where further research is needed. The purpose of a literature
review is to provide a comprehensive and up-to-date understanding of the current state of
knowledge and research related to a specific topic. This helps researchers to develop their
research questions, hypotheses, and methodology, and to situate their study within the
broader academic discourse. Literature reviews are often included in research papers, theses,
dissertations, and other academic works, and they play an important role in demonstrating the
originality, significance, and contribution of the research.

1. "The Intelligent Investor" by Benjamin Graham:E Intelligent Investor" is a book

written by Benjamin Graham, an influential investor, economist, and professor who is
widely considered to be the father of value investing. First published in 1949, the book is
widely regarded as one of the most important investment.

2. "A Random Walk Down Wall Street" is a book written by Burton Malkiel:
a professor of economics at Princeton University. First published in 1973, the book is a
classic and has been updated several times to reflect changes in the financial markets.

3. "The Four Pillars of Investing" by William Bernstein: "The Four Pillars of Investing"
is a book written by William Bernstein, a neurologist turned financial theorist and
investment advisor. The book, first published in 2002, is a comprehensive guide to
building and managing a successful investment portfolio.The "four pillars" referred to in
the book's title are asset allocation, market efficiency, the history of the stock market.

4. "Investment Valuation: Tools and Techniques for Determining the Value of Any
Asset" is a book written by Aswath Damodaran,: a professor of finance at New York
University's Stern School of Business. First published in 1996, the book is now in its

Page no: 32
 third edition and has become a widely used textbook for finance and investing
courses.The book provides a comprehensive guide to the process of valuation, which
involves determining the intrinsic value of an asset based on its expected cash flows,
growth prospects, risk, and other factors. .

5. "The Little Book of Common Sense Investing" is a book written by John C. Bogle,:
the founder of Vanguard Group and a pioneer in the field of index fund investing. First
published in 2007, the book has become a classic and is widely regarded as one of the
most influential books on investing ever written.The book argues that the key to
successful investing is to focus on the long-term and to adopt a simple, low-cost.

6. "The Essays of Warren Buffett: Lessons for Corporate America": is a book written
by Warren E. Buffett, one of the most successful investors of all time and the chairman
and CEO of Berkshire Hathaway. The book is a collection of Buffett's annual letters to
shareholders, which he has been writing since 1965, and provides a unique insight into
his investment philosophy and approach to business.The essays cover a wide range of
topics related to investing and business, including the importance of value investing, the
role of management in creating shareholder value, and the need for corporate governance
and accountability.

7. "The Art of Asset Allocation" is a book written by David H. Darst:, a well-known

investment strategist and financial advisor. The book covers the important topic of asset
allocation, which is the process of dividing an investment portfolio among different asset
categories, such as stocks, bonds, real estate, and commodities, in order to achieve a
specific investment objective.In the book, Darst emphasizes the importance of asset
allocation as a key driver of investment success.

8. "Global Asset Allocation: A Survey of the World's Top Asset Allocation

Strategies" is a book written by Meb Faber: a well-known financial author and
investment strategist. The book provides an in-depth survey of the world's top asset
allocation strategies, examining the approaches of some of the most successful investors
and money managers of our time.Faber explores a variety of asset allocation strategies
used by successful investors.

Page no: 33
9. "The Only Guide to a Winning Investment Strategy You'll Ever Need" is a book
written by Larry E. Swedroe:, a well-known financial author, investment advisor, and
portfolio manager. The book provides a comprehensive guide to building a winning
investment strategy, based on decades of research and practical experience.Swedroe
emphasizes the importance of developing an evidence-based investment strategy that is
grounded in academic research and a deep understanding of the markets.

10. "Portfolio Management Formulas: Mathematical Trading Methods for the Futures,
Options, and Stock Markets" is a book written by Ralph Vince,: a well-known
expert in the field of portfolio management and trading systems. The book provides a
comprehensive guide to mathematical trading methods and portfolio management
strategies that can be applied to the futures, options, and stock markets.Vince emphasizes
the importance of developing a systematic and mathematical approach to trading and
portfolio management. He provides a detailed overview of the key mathematical
formulas and techniques used in portfolio management.

11. "Investments" is a comprehensive textbook on investments, written by Zvi Bodie,

Alex Kane, and Alan J. Marcus:. The book provides a comprehensive overview of the
key concepts and principles of investments, including the various types of securities and
financial instruments, the different investment strategies and approaches, and the factors
that influence investment performance.

12. "The Handbook of Portfolio Mathematics" is a book written by Ralph Vince, a

well-known expert in the field of portfolio management and mathematical finance. The
book provides a comprehensive guide to portfolio mathematics, including the
mathematical principles and formulas used in portfolio management, as well as practical
applications and strategies for optimizing portfolio performance..

13. "Modern Portfolio Theory and Investment Analysis" is a textbook written by

Edwin J. Elton and Martin J. Gruber: That provides a comprehensive overview of
modern portfolio theory and its applications to investment analysis. The book covers a
wide range of topics, including portfolio construction, asset allocation, risk management,
and performance evaluation.

Page no: 34
14. "Active Portfolio Management" by Richard C. Grinold and Ronald N. Kahn: is a
book that provides a quantitative approach to active portfolio management. The book
offers a comprehensive framework for managing a portfolio of investments with the goal
of generating superior returns and controlling

15. "Portfolio Construction and Analytics" by Frank J. Fabozzi: is a book that provides
a comprehensive guide to portfolio construction and analytics. The book covers a wide
range of topics, including asset allocation, risk management, and performance evaluation,
and emphasizes the importance of a systematic and disciplined approach to portfolio
management.

16. "Quantitative Equity Portfolio Management: Modern Techniques and

Applications" by Ludwig B. Chincarini and Daehwan Kim: is a comprehensive book
that focuses on the use of quantitative techniques in equity portfolio management. The
book covers a range of topics, including data mining, factor models, risk management,
and performance evaluation, and provides practical guidance on how to implement these
techniques in a real-world trading environment.

17. "Portfolio Optimization and Performance Analysis" by Jae K. Shim and Joel G.
Siegel: is a comprehensive book that covers portfolio optimization and performance
analysis techniques. The book is organized into three parts, which cover the principles of
portfolio optimization, performance measurement and attribution, and risk management.

18. "The Complete Guide to Modern Portfolio Theory and Investment Analysis" by
Ronald J. Surz: is a comprehensive book that provides an in-depth exploration of
Modern Portfolio Theory (MPT) and its applications in investment analysis. The book is
organized into three parts, which cover the principles of MPT, practical applications of
MPT, and alternative investment approaches.The first part of the book provides an
overview of MPT, including the principles of asset allocation, diversification, and risk
management.

Page no: 35
CHAPTER 4:DATA INTERPRETATION AND DATA ANALYSIS

Page no: 36
4.1 DATA INTERPRETATION
4.2. ANALYSIS
❖ AGE

➢ 18-25
➢ 25-40
➢ 40 & ABOVE
DATA ANALYSIS:
PARTICULARS NO OF RESPONDENTS
18-25 25
25-40 3
40 & Above 2

Data Interpretation :

1. The range between 18-25 years respondents are 83.3%.

2. The data collected only 10% between 25-40 years Respondents.
3. The age between 40 and above only 6.7% of data collected.

Page no: 37
❖ GENDER

➢ Male
➢ Female

DATA ANALYSIS:
PARTICULARS NO OF RESPONDENTS
Male 16
Female 14

Data Interpretation :

• The Data collected of 53.3% of the Male respondents.

• Only 46.7% Data is collected from Female respondents.

Page no: 38
❖ Did you ever invested your money in any investment?

➢ Yes
➢ No
➢
DATA ANALYSIS:
PARTICULARS NO OF RESPONDENTS
YES 24
NO 6

Data Interpretation :
• 80% of the respondents invest there money in investments.
• 20% are not invested there in any investment.

Page no: 39
❖ Which tenure of investment do you prefer?

➢ Short term
➢ Mid term
➢ Long term

DATA ANALYSIS:
PARTICULARS NO OF RESPONDENTS
SHORT TERM 10
MID TERM 6
LONG TERM 14

Data Interpretation :
• 36.7% of the respondents are invest for short term.
• 20% are invest for mid term.
• 43.3% are invest for long term investment.

Page no: 40
❖ Which investment securities should be included in portfolio?

➢ Mutual funds
➢ Fixed Deposits
➢ Life insurance Schemes
➢ Gold and Sliver
➢ Real Estate
➢ Shares
➢ Money market instrument
➢ Other

Data Interpretation :
• 66.7% of respondents mutual funds like to add in there portfolio.
• 43.3% of respondents like to invest in Fixed Deposits.
• 36.6% respondents like to invest in Life Insurance Schemes.
• In Gold and Silver there are 53.3% respondents like to invest.
• 50% of respondent like to invest in Real estate.
• 46.7% of respondents like Shares to add in there portfolio.
• 23.3% of money Market to add in there portfolio.
• 13.3% to Others

Page no: 41
❖ Have you received any income in Portfolio investment?

➢ Yes
➢ No

DATA ANALYSIS:
PARTICULARS NO OF RESPONDENTS
YES 23
NO 7

Data Interpretation:

• 76.7% of respondents get income from portfolio investment.

• 23.3% not yet received any income from portfolio investment.

Page no: 42
❖ How much Returns did you expect from yours securities?

➢ 10%
➢ 20%
➢ 50%
➢ 100%

DATA ANALYSIS:
PARTICULARS NO OF RESPONDENTS
10% 10
20% 10
50% 6
100% 4

Data Interpretation:

• 33.3% of respondents wants expected 10% returns from there securities.

• 33.3% of respondents wants 20% expected returns from there securities.
• 20% of respondents wants 50% expected returns from there securities.
• Only 13.3 % of respondents wants 100% Expected returns from there securities.

Page no: 43
❖ What is your risk tolerance in your portfolio?

➢ Higher Risk: Higher Returns

➢ Moderate Risk Moderate Return
➢ Lower Risk Lower Potential Returns

DATA ANALYSIS:
PARTICULARS NO OF RESPONDENTS
Higher Risk: Higher Returns 12
Moderate Risk Moderate Return 13
Lower Risk Lower Potential 5
Returns.

Data Interpretation:

• 40% of respondents wants Higher Risk: Higher Returns.

• 43.3% of respondents wants Moderate Risk Moderate Return.
• Only 16.7 of respondents wants Lower Risk Lower Potential Returns

Page no: 44
❖ How often do you Plan to review and rebalance your portfolio?

➢ Monthly
➢ Quarterly
➢ Annually
➢ Every 3 year

DATA ANALYSIS:
PARTICULARS NO OF RESPONDENTS
Monthly 17
Quarterly 7
Annually 5
Every 3 year 1

Data Interpretation:

• 56.7% of the respondents review and rebalance there portfolio in monthly.

• 23.3% of the respondents review and rebalance there portfolio in quarterly
• 16.7% of the respondents review and rebalance there portfolio in Annually
• Only 3.3% of respondents review and rebalance there portfolio in every 3 year.

Page no: 45
❖ Which type of investments options you enter in your Portfolio?
➢ Easy Liquidity
➢ Low Liquidity

DATA ANALYSIS:
PARTICULARS NO OF RESPONDENTS
Easy Liquidity 26
Low Liquidity 4

Data Interpretation:

• 86.7% of the respondents wants Easy Liquidity of securities.

• Only 13.3% of the respondents wants Low Liquidity of the securities.

Page no: 46
❖ When to Buy or Sell investment in your Portfolio?

➢ Monthly
➢ Quarterly
➢ Annually
➢ When Needed

DATA ANALYSIS:
PARTICULARS NO OF RESPONDENTS
Monthly 11
Quarterly 8
Annually 5
When Needed 6

Data Interpretation:
• 36.7% of respondents like to Buying and selling of investment monthly for there
portfolio.
• 26.7% of respondents like to Buying and selling of investment Quarterly for there
portfolio.
• 16.7% of respondents like to Buying and selling of investment Annually for there
portfolio.
• Only 20% of respondents buying and selling of investment when Needed.

Page no: 47
❖ Do you think it should be continue in the future portfolio management
of investments?

➢ Yes
➢ No

DATA ANALYSIS:
PARTICULARS NO OF RESPONDENTS
Yes 26
No 4

Data Interpretation:

• 86.7% of respondents likely to continue there portfolio in Future.

• Only 13.3% of respondents not likely to continue there portfolio in future.

Page no: 48
 CHAPTERS 5
CONCLUSIONS AND SUGGESTIONS

Page no: 49
5.1. FINDINGS:
1. Above data analysis show the results that the survey among the people of Ulhasnagar
about knowledge regarding portfolio management of investments.
2. From the above survey we get 53.3% of the MALE Responses and 46.7% form
Females.
3. Most of the responses are between the age of 18-25 which is 83.3% and 10% of 25-40
age group and 6.7% respondence are 40 and Above age.
4. From survey we get only 80% of the respondence invest there money in investment
and 20% not.
5. The range between 36.7% of respondent invet there money for short term.20% mid
term investment and higest 43.3% for long term investment .
Most of the respondents like to invest there money in 1.Mutual funds 2.Gold and Sliver 3.
Real estate 4. Shares 5. Fixed deposits 6.Life insurance schemes 7.Money market
instruments 8.Other
⚫ Only 76.7% of respondence received any income from there portfolio investment and
23.3% not yet receive any income.
⚫ Most of the resondence invest for returns 33.3% are expected return is 10% and 33.3%
for 20% expected return.20% of respondence for 50% return expected and 13.3% are
expected 100% return from there portfolio.
⚫ All responses are bare a certain % of risk like 40% of responses like to tolerate.Higher
risk and higher returns.43.3% for moderate risk and moderat returns.16.7% for lower risk
and lower returns.
⚫ Every respondent are like to review and rebalance there portfolio 56.7% review there
portfolio in monthly.23.3% in Quarterly and 16.7% in Annually. Only 3.3% respondent
review there portfolio in Every 3 year
⚫ 86.7% of respodent want Easy Liquidity and 13.3% want Lower Liquidity of investment.
⚫ Every respodent buy and sell there invest from there portfolio 36.7% are buy and sell
there investment in monthly.26.7% in Quarterly 16.7% in Annually and only 20% of
respondent buy or sell there invesment when needed.
⚫ In future 86.7% of respodent continue there portfolio investment and 13.3% not continue
there portfolio in future.

Page no: 50
5.2. SUGGESTIONS:
◆ Establish investment objectives: Determine your investment goals and risk tolerance, and
establish clear investment objectives.
◆ Allocate assets: Determine the appropriate allocation of assets based on your investment
objectives and risk tolerance.
◆ Monitor market conditions: Stay informed about economic and market trends that may
impact your investments.
◆ Use dollar-cost averaging: Invest a fixed amount of money regularly over time, to reduce
the impact of market fluctuations.
◆ Review performance: Regularly review the performance of your investments to ensure
they are meeting your investment objectives.
◆ Consider tax implications: Consider the tax implications of your investments, and seek
professional advice if needed.
◆ Use low-cost investments: Use low-cost investments, such as index funds or ETFs, to
reduce investment expenses.
◆ Stay diversified: Continuously review and diversify your investments to manage risk.
◆ Keep investing simple: Avoid overly complex investment strategies, and stick to simple
investment principles.
◆ Consider professional advice: Consider seeking professional advice from a financial
advisor or investment manager.
◆ Stay disciplined: Stick to your investment plan and avoid making emotional decisions.
◆ Use a long-term approach: Take a long-term approach to investing, and avoid short-term
speculation.
◆ Avoid herd mentality: Avoid following the crowd and making investment decisions
based on popular trends.
◆ Evaluate risk: Evaluate the risk of each investment and consider how it fits into your
overall portfolio.
◆ Be patient: Be patient and don't expect overnight success. Investing takes time and
discipline.
◆ Stay informed: Stay informed about changes in the financial markets and economic
conditions that may affect your investments.

Page no: 51
5.3. CONCLUSIONS:

Portfolio management is a crucial aspect of investment management that involves the

selection, monitoring, and evaluation of various investment assets with the objective of
achieving optimal returns while minimizing risks. The primary goal of portfolio management
is to strike a balance between risk and return by creating a well-diversified investment
portfolio that aligns with an investor's goals and risk appetite.
One of the essential aspects of portfolio management is asset allocation, which involves
dividing investment funds among various asset classes such as equities, fixed income
securities, real estate, and alternative investments. Asset allocation is crucial in reducing the
overall risk of a portfolio by diversifying across various assets that have different risk profiles
and return potentials.
Another key aspect of portfolio management is risk management, which involves analyzing
and mitigating the various risks that a portfolio may face. These risks may include market
risks, credit risks, liquidity risks, and inflation risks, among others. Effective risk
management is crucial in protecting a portfolio from potential losses while maximizing
returns.
In addition to asset allocation and risk management, portfolio management also involves
ongoing monitoring and evaluation of portfolio performance. Regular monitoring and
evaluation enable portfolio managers to identify potential issues early and make necessary
adjustments to the portfolio to ensure that it remains aligned with the investor's goals and risk
tolerance.

Page no: 52
5.4 REFERENCES:

• Bodie, Z., Kane, A., & Marcus, A. J. (2018). Investments. McGraw-Hill Education.

• Markowitz, H. M. (1952). Portfolio selection. The Journal of Finance, 7(1), 77-91.

• Sharpe, W. F. (1964). Capital asset prices: A theory of market equilibrium under

conditions of risk. The Journal of Finance, 19(3), 425-442.

• Grinold, R. C., & Kahn, R. N. (2017). Active portfolio management: A quantitative

approach for producing superior returns and controlling risk. McGraw-Hill Education.

• Elton, E. J., Gruber, M. J., Brown, S. J., & Goetzmann, W. N. (2014). Modern
portfolio theory and investment analysis. John Wiley & Sons.

• Fabozzi, F. J., & Markowitz, H. M. (2002). The theory and practice of investment
management. John Wiley & Sons.

• Malkiel, B. G. (2019). A random walk down Wall Street: The time-tested strategy
for successful investing. WW Norton & Company.

• Bernstein, P. L. (2014). The intelligent asset allocator: How to build your portfolio to
maximize returns and minimize risk. McGraw Hill Professional.

• Hull, J. C. (2015). Options, futures, and other derivatives. Pearson Education.

• Litterman, R. (2003). Modern investment management: An equilibrium approach.

John Wiley & Sons.

Page no: 53
CHAPTER 6. BIBILOGRAPHY

Google: https://www.google.com/
Wikipedia: https://en.wikipedia.org/wiki/Portfolio_management
Wikipedia: https://en.wikipedia.org/wiki/Investment_management
The Motley Fool: https://www.fool.com/investing/how-to-manage-a-portfolio/
Vanguard: https://investor.vanguard.com/investing/how-to-invest/portfolio-
managemenT
Fidelity: https://www.fidelity.com/learning-center/investment-products/mutual-
funds/portfolio-management
BlackRock: https://www.blackrock.com/us/individual/education/portfolio-management
E Trade: https://us.etrade.com/what-we-offer/investment-choices/portfolio-management
TD Ameritrade: https://www.tdameritrade.com/education/investment-
products/portfolios.page
Betterment: https://www.betterment.com/resources/investment-strategy/portfolio-
management/
MSCI: https://www.msci.com/portfolio-management
Franklin Templeton: https://www.franklintempleton.com/investor/investments-and-
solutions/portfolio-management
BMO Global Asset Management:
https://www.bmo.com/global/investments/solutions/portfolio-management

Page no: 54
CHAPTER 7. APPENDIX:

1. Did you ever invested your money in any investment?

◆ Yes
◆ No

2. Which tenure of investment do you prefer?

◆ Short term
◆ Mid term
◆ Long term

3. Which investment securities should be included in portfolio?

◆ Mutual fund
◆ Fixed Deposits
◆ Life Insurance Schemes
◆ Gold and silver
◆ Real estate
◆ Shares
◆ Money Market instruments
◆ Other

4. Have you received any income in Portfolio investment?

◆ Yes
◆ No

5. How much Returns did you expect from yours securities?

◆ 10%
◆ 20%
◆ 50%
◆ 100

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6.What is your risk tolerance in your portfolio?
◆ Higher Risk: Higher Returns
◆ Moderate Risk: Moderate Return
◆ Lower Risk:Lower Potential Returns

7. How often do you Plan to review and rebalance your portfolio?

◆ Monthly
◆ Quarterly
◆ Annually
◆ Every 3 year

8. Which type of investments options you enter in your Portfolio?

◆ Easy Liquidity
◆ Low Liquidity

9. When to Buy or Sell investment in your Portfolio?

◆ Monthly
◆ Quarterly
◆ Annually
◆ When Needed
◆ Other:

10. Do you think it should be continue in the future portfolio management of investments?
◆ Yes
◆ No

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