What is Portfolio Management?
The process of selecting and managing the investments of individuals or organizations to meet their long-term financial goals is called portfolio management. Portfolio managers play a key role in managing the investments and use different methodologies and strategies keeping in view the economic outlook, risk tolerance, and financial objectives of the client. Portfolio Management Strategies: Broadly speaking, portfolio managers typically follow a combination of the following portfolio management strategies: 1- Asset Allocation 2- Diversification 3- Rebalancing 4- Active Portfolio management 5- Passive Portfolio management Let’s discuss in detail how portfolio managers implement the strategies to manage large portfolios: 1- Asset allocation: Portfolio managers invest funds in different asset classes such as stocks, bonds, commodities, real estate, etc to keep the risk of the portfolio to a minimum. The key is to invest the funds in different asset classes while...