MSG Team's other articles

11361 Anatomy of a Sports League Franchise Agreement

We have already discussed that sports leagues across the world follow the franchise model. Franchising is at the core of billion-dollar sports leagues which take place across the world. It is important to realize that franchising provides the legal and business framework which ensures coordination between the actions of different league participants. It is important […]

9517 Hard Brexit vs. Soft Brexit

The British government has held a referendum wherein the majority of British citizens voted to leave the European Union. This phenomenon has been popularly named “Brexit” by the media. The fact that Britain will leave the European Union is certain. However, there is still a lot of uncertainty regarding the terms on which Britain will […]

10578 Payment Mechanisms in Public-Private Partnerships

In every public-private partnership, it is the job of the public party to provide remuneration to the private party. There are various mechanisms in which this payment can be provided. In this article, we will discuss the mechanisms which are commonly used in public-private partnerships. User Charges User charges are a commonly used mechanism when […]

12671 Cashless Economy: Pros and Cons

Governments across the world have stepped up their fight against cash. Cash is being increasingly viewed as a curse that mankind needs to rid itself of. The goal is to move towards a cashless economy. The closer an economy is towards this goal, the more successful it is considered to be. However, the concept of […]

9573 How Buy Now and Pay Later (BNPL) Works in the Retail Industry?

The retail industry has been constantly innovating in order to become financially more viable. There are several innovations which have been introduced in the retail industry. However, very few innovations have been as effective as the Buy Now Pay Later (BNPL). The use of Buy Now Pay Later (BNPL) payments has been increasing over the […]

Search with tags

  • No tags available.

It is essential for individuals to invest wisely for the rainy days and to make their future secure.

What is a Portfolio ?

A portfolio refers to a collection of investment tools such as stocks, shares, mutual funds, bonds, cash and so on depending on the investor’s income, budget and convenient time frame.

Following are the two types of Portfolio:

  1. Market Portfolio
  2. Zero Investment Portfolio

What is Portfolio Management ?

The art of selecting the right investment policy for the individuals in terms of minimum risk and maximum return is called as portfolio management.

Portfolio management refers to managing an individual’s investments in the form of bonds, shares, cash, mutual funds etc so that he earns the maximum profits within the stipulated time frame.

Portfolio management refers to managing money of an individual under the expert guidance of portfolio managers.

In a layman’s language, the art of managing an individual’s investment is called as portfolio management.

Need for Portfolio Management

Portfolio management presents the best investment plan to the individuals as per their income, budget, age and ability to undertake risks.

Portfolio management minimizes the risks involved in investing and also increases the chance of making profits.

Portfolio managers understand the client’s financial needs and suggest the best and unique investment policy for them with minimum risks involved.

Portfolio management enables the portfolio managers to provide customized investment solutions to clients as per their needs and requirements.

Types of Portfolio Management

Portfolio Management is further of the following types:

  • Active Portfolio Management: As the name suggests, in an active portfolio management service, the portfolio managers are actively involved in buying and selling of securities to ensure maximum profits to individuals.

  • Passive Portfolio Management: In a passive portfolio management, the portfolio manager deals with a fixed portfolio designed to match the current market scenario.

  • Discretionary Portfolio management services: In Discretionary portfolio management services, an individual authorizes a portfolio manager to take care of his financial needs on his behalf. The individual issues money to the portfolio manager who in turn takes care of all his investment needs, paper work, documentation, filing and so on. In discretionary portfolio management, the portfolio manager has full rights to take decisions on his client’s behalf.

  • Non-Discretionary Portfolio management services: In non discretionary portfolio management services, the portfolio manager can merely advise the client what is good and bad for him but the client reserves full right to take his own decisions.

Who is a Portfolio Manager ?

An individual who understands the client’s financial needs and designs a suitable investment plan as per his income and risk taking abilities is called a portfolio manager. A portfolio manager is one who invests on behalf of the client.

A portfolio manager counsels the clients and advises him the best possible investment plan which would guarantee maximum returns to the individual.

A portfolio manager must understand the client’s financial goals and objectives and offer a tailor made investment solution to him. No two clients can have the same financial needs.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles

The Perils of the Immediacy Trap and Why we can and cannot do without it

MSG Team

What are Bonds? – Characteristics and Different Types of Bonds

MSG Team

What are Market Indices ?

MSG Team