PORTFOLIO

MANAGEMENT
What is portfolio?
Portfolio is a group of various assets like shares, debentures,
bonds, fixed deposits, etc. in which an investor invests his funds
to reduce the risks involved in any single investment. For
example instead investing in single investment the investor
invests in multiple investments.

What is portfolio management?

Portfolio management is the process of portfolio construction,
revision and continuous evaluation of a portfolio. Portfolio
management is done with an objective to achieve a return
commensurate with the risk appetite of the investor.

The portfolio management is five steps

process which are discussed below
 1. Security Analysis
2. Portfolio Analysis
3. Portfolio Selection
4. Portfolio Revision Performance Evaluation
5. Portfolio Evaluation

1. Security Analysis- The building block of a portfolio is a security. So, in order

to construct a portfolio, the investor is required to select the securities.
There are n number of securities in the market. Now, the investor has to
decide the security in which he should invest.

2. Portfolio Analysis- After analysing the securities, an investor can have a list of
the securities in which he can make the investment. But at times, it’s not feasible
to invest in all the shortlisted securities. Therefore, he has to pick a can be
clubbed in different combinations making different portfolios.

3. Portfolio Selection- Once the efficient portfolios are identified, the next step is
to select the optimum portfolio. The optimum portfolio is one which optimizes
the utility of the investor given his risk and return constraint. This process is
known as the portfolio selection.
4. Portfolio Revision- The job of the investor is not over with the portfolio
selection. Rather, portfolio management is a continuous process. With the advent
of time, it is possible that there is a change in the economic conditions which in
turn may bring a change in the financial environment in which the investment
decisions are made

5. Portfolio Evaluation- It is crucial to evaluate the portfolio in order to ascertain

whether they have performed as per the expectation of the investor or not.
Portfolio evaluation means assessing the actual return and risk of the portfolio
over a specified period.

Name =Mohd Jamal

Roll no.=962
Course= Ba program(accounting and
finance + computer application).
Subject= Fundamentals of investment.