What is Portfolio Management and How to Perform?
                     WHAT IS PORTFOLIO MANAGEMENT AND HOW TO PERFORM 
PORTFOLIO MANAGEMENT?
 Portfolio management is the process of making decisions about 
matching investments to objectives, investment mix and policy, 
asset allocation for individuals and institutions, and balancing risk 
against performance. 
INTRODUCTION
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 Portfolio management is all about determining strengths, 
weaknesses, opportunities, and threats in the choice of debt vs. 
equity, domestic vs. international, growth vs. safety, and many 
other trade-offs encountered in the attempt to maximize return at a 
given appetite for risk.
WHAT IT DOES?
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 The terms "portfolio management" and "financial planning" are not 
synonyms; they are not the same. Portfolio management is the act 
of creating and maintaining an investment account. Whereas, 
financial planning is the process of developing financial goals and 
setting up a plan of action to achieve them.
UNDERSTANDING 
PORTFOLIO 
MANAGEMENT
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 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.
NEED FOR 
PORTFOLIO 
MANAGEMENT
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 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.
NEED FOR 
PORTFOLIO 
MANAGEMENT 
CONT.
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TYPES OF 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.
ACTIVE 
PORTFOLIO 
MANAGEMENT
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  In a passive portfolio management, the portfolio manager deals 
with a fixed portfolio designed to match the current market 
scenario.
PASSIVE 
PORTFOLIO 
MANAGEMENT
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 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.
DISCRETIONARY 
PORTFOLIO 
MANAGEMENT 
SERVICES
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 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.
NON-
DISCRETIONARY 
PORTFOLIO 
MANAGEMENT 
SERVICES
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 Step 1: Assess the Current Situation
 Step 2: Establish Investment Objectives
 Step 3: Determine Asset Allocation
 Step 4: Select Investment Options
 Step 5: Monitor, Measure, and Rebalance
PORTFOLIO 
MANAGEMENT 
PROCESS
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