Portfolio Management
Portfolio management is the art and science of selecting and overseeing a group of investments that meet the long-term financial objectives and risk tolerance of an investor. Effective portfolio management involves making strategic decisions about investment mix and policy, matching investments to objectives, and balancing risk against performance.
Key aspects of portfolio management include asset allocation, diversification, rebalancing, and performance monitoring. A well-managed portfolio adapts to changing market conditions and life circumstances while maintaining alignment with the investor's goals and risk tolerance.
Asset Allocation
Asset allocation distributes investments across stocks, bonds, and alternative assets based on risk tolerance, time horizon, and financial goals to optimize the risk-return profile.
Portfolio Rebalancing
Rebalancing restores a portfolio to its target asset allocation by selling overweighted assets and buying underweighted ones, maintaining desired risk levels.