The practise of maintaining a portfolio of investments, which includes a variety of financial assets such stocks, bonds, mutual funds, and other securities, is known as portfolio management.
The aim of portfolio management is to reduce risk while maximising return on investment.
Diversification, rebalancing, and asset allocation are just a few of the tasks involved in portfolio management.
Choosing how much of the portfolio should be split up across various asset classes, such as stocks, bonds, and cash, is known as asset allocation.
To minimise the effect of the performance of any one investment on the portfolio as a whole,
Diversification entails distributing assets across many industries, sectors, and geographical areas.
Rebalancing is the process of making periodic adjustments to the portfolio to keep the correct asset allocation and degree of risk.
To analyse assets and manage portfolios, professional portfolio managers may employ a range of quantitative and qualitative techniques.
These techniques might involve market research, technical analysis, and fundamental analysis.
A diversified portfolio that satisfies an investor's investment objectives, risk tolerance, and time horizon is the ultimate goal of portfolio management.
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