Portfolio Management Process- A Road To Fulfilling Client’s Investment Goals Timing and perspective are the most pivotal things in a project portfolio management process and they are hard to achieve. It’s an ongoing process with integrated steps compiled efficiently to create and manage an appropriate portfolio of assets in order to achieve client’s specific goals. To maintain a clear portfolio, the portfolio managers sometimes have to pen-down specific strategies to balance the risk-return trade-off. They need to go through the whole portfolio instead of an individual asset. The whole portfolio carries a systematic risk which is due to the influence of economic fundamentals on the returns of the stock. But the individual investments carry an unsystematic risk which however can be veered, by bundling the investment into one sole portfolio. Some of the portfolio managers, investors and analysts are only concerned with the systematic risk of the whole portfolio. While there are many other methods to manage the portfolio, there’s a fixed procedure also that you can follow to meet your investment goals.
Create a Policy Statement: The most crucial step in portfolio
management is to create a policy statement. It’s a statement that comprises of investor’s goals and constraints related to his investments. Any limitations, desires regarding risk and return are contained in this.
Develop an investment strategy: An efficient strategy is very
important to fulfil any needs. Once the objective is identified, the next step is to make a good strategy to fulfil client’s requirements. The strategy entails investor’s objectives and goals with market’s current financial and economic conditions.
Implement the plan created: This step is to put the created strategy to work by investing in a good portfolio that meets the client’s desired goals.
Monitor and update the Plan: Market is never constant; it keeps on changing and so as the investors. So it’s very important to monitor those changes to adjust or update the plan to adjust for the changes that have occurred in the market. The manager also has to evaluate risk exposures of the portfolio, economic fundamentals to ensure that investments constraints are being maintained.
A complete set of steps compiled to fulfil client’s need is what portfolio managements is all about. With the investment policy statement being a crucial step, the portfolio manager can create and evaluate the performance of any portfolio. So carefully plan and endeavour your client’s requirements.
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