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  • The Portfolio Management Process, by Tariq Ali Asghar

    Nov 12, 2012

    The Portfolio Management process comprises of six key steps:
    (1)-The first step for the Portfolio Manager is to determine the Investment objective in terms of risk-return of the Investment and identify any potential constraints of the investor.
    (2)-Design of an Investment Policy Statement (IPS). This statement envisages the objectives, risk tolerance and constrains of the Investor.
    (3)-Analyze best possible asset allocation strategy; that would help investors to reach his or her goals. Note that asset allocation constitutes 90% of returns of the Portfolio; and therefore piggybacking Guru stocks will not help beat the Market.
    (4)-The Portfolio manager implements the Investment Strategy as agreed upon with the Investor; and using his specific asset allocation strategy.
    (5)-Monitor the asset allocation process driven by the economy, the markets, the portfolio and the client.
    (6)-Evaluate performance in hindsight and anticipate future outcomes.

    DISCLAIMER: The views expressed in this Blog are my personal views/analysis. It does not represent views of any organization or group, for which I am doing consulting or employment. The purpose of this blog is academic and informative; and is not sale of any product or service. The author does not own responsibility (liability) for any information presented in this blog; as investment information tends to change rapidly.