It is very important to make investment in only those stocks and instruments that helps you in achieving your long term financial objectives. Managing your portfolio involves creating and overseeing such selection of financial assets so that you may meet your financial goals. Managing your portfolio requires strategic buying and selling of shares and other financial instruments. This clever investment aims to beat the broader market. You may take advantage of Stock Portfolio Management Services in india where a portfolio manager makes a well thought portfolio comprised of stocks, fixed income, debt, cash, structured products and different securities to gain profits.
What is a portfolio management service?
A portfolio management firm in India is a significant service based on a portfolio manager. The portfolio manager tries to suggest sound investment decisions based on his choice, timing and other factors. Resorting to such decisions as suggested by the manager rests completely on the investor. There are non discretionary services where the execution of a transaction is done by a portfolio manager. These managers are backed by a professional research team that aims to manage portfolio on behalf of their clients.
Portfolio management may be active or passive. Active portfolio management involves actively buying and selling stocks to beat the market. Passive portfolio management involves trading in exchange traded index funds.
Discretionary portfolio management service is however different from equity mutual funds. If you are investing in mutual funds, you are alloted some units that represent your holding. Under portfolio management service, the manager creates a segregated demat account where the portfolio is held on his behalf. They are provided with a power of attorney to trade stocks in and out of their account.
Elements of a project portfolio management system
These are the main elements in a portfolio management system:-
Mix of asset allocation
A portfolio management system is a mix of assets that generally include stocks, bonds and cash certificates. The assets may be different like real estate, commodities, and derivatives. Allocation is done based on the fact that different assets have different liquidity and some are more liquid than others. If you are an investor of conservative nature, you must be looking for stable investments and if you are an aggressive investor, you must be looking for more profitable options.
Considering the fact that it is difficult to estimate which stock will win and which one will lose, it is always better to invest your money in a basket of stocks. It means spreading your risk in a basket comprised of diverse stocks of same or different asset classes.This element aims at achieving returns of all the sectors over time while decreasing volatility of the shares. Diversification is done in various class of securities, different regions and different economic sectors.
To return the asset to it’s normal asset allocation, rebalancing is done at regular intervals. The original asset mix is reinstated making the market forces not affecting your portfolio much. It generally involves selling high priced securitiesand buying low priced securities. It allows an investor to capture profits and grow more.