Portfolio Management - Part 1
By Rohit Singh
5/5
()
About this ebook
Part 1 of 2 of Portfolio Management.
Many people consider investing to be a daunting activity. They are bewildered by the profusion and proliferation of investment alternatives, rattled by the fluctuations in financial prices, overwhelmed by the presence of mighty institutional investors, confused by exotic instruments and complicated investment strategies, confused by the intricacies of the tax system, and exasperated by the financial scams that periodically rock market.
Notwithstanding these concerns, investing can be fairly manageable, rewarding, and enjoyable experience, if we adhere to certain principles and guidelines. By this we can expect and hope to maximize our returns by diversifying our investments into suitable portfolios. For this, each and every investor has to be well educated about economy, investment options, market conditions and its consequences.
The main objective is to select the suitable investment criteria like if we want better returns, or consider risk factors, or liquidity or safety of principal. By this we can set our portfolio objectives and construct our portfolio according to our needs and manage it with respect to the market conditions and the securities fairing in the market.
Related to Portfolio Management - Part 1
Related ebooks
Portfolio Management in Practice Rating: 5 out of 5 stars5/5Asset Allocation for Small Investors Rating: 0 out of 5 stars0 ratingsInvesting in Hedge Funds: A Guide to Measuring Risk and Return Characteristics Rating: 0 out of 5 stars0 ratingsAsset Allocation and Effective Portfolio Management: Part One Rating: 4 out of 5 stars4/5A simple approach to bond trading: The introductory guide to bond investments and their portfolio management Rating: 5 out of 5 stars5/5Short and Simple Guide to Smart Investing Rating: 0 out of 5 stars0 ratingsInvesting Formula Rating: 0 out of 5 stars0 ratingsPortfolio Management - Part 2: Portfolio Management, #2 Rating: 5 out of 5 stars5/5Financial Statement Analysis Fundamentals Rating: 0 out of 5 stars0 ratingsGrowth Investment Crash Course Rating: 0 out of 5 stars0 ratingsPersonal Investment Crash Course Rating: 0 out of 5 stars0 ratingsRisk Management for Small Investors Rating: 2 out of 5 stars2/5Mastering Personal Finance and Investing Rating: 0 out of 5 stars0 ratingsSecurity Valuation: A Simple Introduction Rating: 5 out of 5 stars5/5Active Alpha: A Portfolio Approach to Selecting and Managing Alternative Investments Rating: 0 out of 5 stars0 ratingsPortfolio Construction for Today's Markets: A practitioner's guide to the essentials of asset allocation Rating: 5 out of 5 stars5/5Strategic Risk Management: A Practical Guide to Portfolio Risk Management Rating: 5 out of 5 stars5/5Investment Valuation: Learn Proven Methods For Determining Asset Value And Taking The Right Investing Decisions Rating: 0 out of 5 stars0 ratingsChasing Yield Rating: 0 out of 5 stars0 ratingsSummary of Richard A. Ferri's All About Asset Allocation, Second Edition Rating: 0 out of 5 stars0 ratingsStock Market Investing for Beginners: The Best Book on Stock Investments To Help You Make Money In Less Than 1 Hour a Day Rating: 0 out of 5 stars0 ratingsThe Intelligent Portfolio: Practical Wisdom on Personal Investing from Financial Engines Rating: 0 out of 5 stars0 ratingsAlternative Investment Strategies and Risk Management: Improve Your Investment Portfolio’S Risk–Reward Ratio Rating: 5 out of 5 stars5/5Bond Investing - A Comprehensive Guide to Bond Market Strategies Rating: 0 out of 5 stars0 ratingsA Practitioner's Guide to Asset Allocation Rating: 0 out of 5 stars0 ratingsThe Investment Assets Handbook: A definitive practical guide to asset classes Rating: 4 out of 5 stars4/5Asset Rotation: The Demise of Modern Portfolio Theory and the Birth of an Investment Renaissance Rating: 0 out of 5 stars0 ratings
Personal Finance For You
Rich Dad Poor Dad Rating: 5 out of 5 stars5/5Summary of The 48 Laws of Power by Robert Greene Rating: 4 out of 5 stars4/5Investing For Dummies Rating: 4 out of 5 stars4/5The Black Girl's Guide to Financial Freedom: Build Wealth, Retire Early, and Live the Life of Your Dreams Rating: 5 out of 5 stars5/5The Psychology of Money: Timeless lessons on wealth, greed, and happiness Rating: 5 out of 5 stars5/5The Intelligent Investor, Rev. Ed: The Definitive Book on Value Investing Rating: 4 out of 5 stars4/510,001 Ways to Live Large on a Small Budget Rating: 3 out of 5 stars3/5The Millionaire Fastlane: Crack the Code to Wealth and Live Rich for a Lifetime Rating: 5 out of 5 stars5/5Money Hacks: 275+ Ways to Decrease Spending, Increase Savings, and Make Your Money Work for You! Rating: 4 out of 5 stars4/5Legal Loopholes: Credit Repair Tactics Exposed Rating: 4 out of 5 stars4/5Same as Ever: Timeless Lessons on Risk, Opportunity and Living a Good Life Rating: 4 out of 5 stars4/5Personal Finance For Dummies Rating: 4 out of 5 stars4/5The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness Rating: 4 out of 5 stars4/5Principles: Life and Work Rating: 4 out of 5 stars4/5Suddenly Frugal: How to Live Happier and Healthier for Less Rating: 3 out of 5 stars3/5Summary of Timothy Ferriss' book: The 4-Hour Workweek: More time, more money, more life: Summary Rating: 5 out of 5 stars5/5Money. Wealth. Life Insurance. Rating: 5 out of 5 stars5/5Rich Dad's Cashflow Quadrant Rating: 4 out of 5 stars4/5Financial Feminist: Overcome the Patriarchy's Bullsh*t to Master Your Money and Build a Life You Love Rating: 5 out of 5 stars5/5Summary of R. Nelson Nash's Becoming Your Own Banker Rating: 0 out of 5 stars0 ratingsJust Keep Buying: Proven ways to save money and build your wealth Rating: 5 out of 5 stars5/5The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns Rating: 4 out of 5 stars4/5The Total Money Makeover by Dave Ramsey: Summary and Analysis Rating: 4 out of 5 stars4/5
Reviews for Portfolio Management - Part 1
8 ratings0 reviews
Book preview
Portfolio Management - Part 1 - Rohit Singh
EXECUTIVE SUMMARY
An investment is a sacrifice of current money or other resources for future benefits. Numerous avenues of investment are available today. The two key aspects of any investment are time and risk. Very broadly, the investment process consists of two tasks. The first task is security analysis which focuses on assessing the risk and return characteristics of the available investment alternatives. The second task is portfolio selection which involves choosing the best possible portfolio from the set of feasible portfolios.
Construction of portfolio is only part of the battle. Once it is built, the portfolio needs to be maintained. The market values, needs of the beneficiary, and relative merits of the portfolio components can change over time. The portfolio manager must react to these changes. Portfolio management usually requires periodic revision of the portfolio in accordance with a predetermined strategy.
The type of sampling technique used is Simple Random Sampling wherein a questionnaire was prepared and distributed to the retail investors. The investor’s profile is based on the results of a questionnaire that the Investors completed. The Sample consists of 50 retail investors from various backgrounds. The target customers were only the retail investors who invest in various avenues so as to know about their knowledge and concern regarding the economy, principal invested, investment options, market conditions etc.
According to the opinion of these investors interpretation has been done and there has been findings and conclusion along with some recommendations.
HYPOTHESIS STATEMENT
A hypothesis is a proposed explanation for an observable phenomenon. The term derives from the Greek word – hypotithenai meaning to put under
or to suppose
.
For the present study it is proposed to have following hypothesis:
Null Hypothesis:
Most of the investors prefer return as their investment criteria rather than risk, liquidity and safety of principal etc.
Alternate Hypothesis:
Most of the investors don’t prefer return as their investment criteria rather go for either risk or liquidity or safety of principal etc.
REVIEW OF LITERATURE
3.1 PORTFOLIO
A portfolio is an appropriate mix of or collection of investments held by an institution or a private individual. It is a collection of securities, since it is rarely desirable to invest the entire funds of an individual or an institution in a single security.
Portfolio analysis considers the determination of future risk and return in holding various blends of individual securities.
Portfolio expected return is a weighted average of the expected return of individual securities but portfolio variance, in short contrast, can be something less than a weighted average of security variances.
As a result an investor can sometimes reduce portfolio risk by adding security with greater individual risk than any other security in the portfolio. This is because risk depends greatly on the co-variance among return of individual securities.
Since portfolios expected return is a weighted average of the expected return of its securities, the contribution of each security to the portfolio’s expected returns depends on its expected returns and its proportionate share of the initial portfolio’s market value.
3.2 RISK
Risk is a concept