My City – Portfolio Management

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Indeed, “portfolio management” is a concept that promotes the idea of ​​diversification. To be honest, let me tell you that the idea of ​​managing your own investments can seem daunting, but no matter how much money you have, there is a level of portfolio management that is right for you. Simply put, however, it can be passive or active in nature. More tellingly, for one thing, passive management is a long-term strategy that often involves simply following a broad market index – commonly referred to as indexing or index investing. On the other hand, active management instead involves a single manager, co-managers, or a team of managers who attempt to beat market performance by actively managing a fund’s portfolio through research-based investment decisions. and decisions on individual holdings. Apart from this, the business strategy underpins the successful management of the project portfolio. Here’s what I’d like to say: Strategy refers to the long-term direction as well as scope of an organization, working towards growth goals in the competitive landscape.

However, an asset allocation relies on understanding different types of asset classes. Therefore, asset allocation seeks to optimize an investor’s risk/return profile by investing in a combination of assets with a low correlation between them. For example, banking, hydropower, finance, microfinance, hospitality and tourism, insurance, etc. That said, having investors with a more aggressive profile can also steer their portfolios towards more volatile investments. Alternatively, investors with a more conventional profile can weight their portfolios towards more stable investments.

Usually, it is impossible to consistently predict winners and losers in the capital market. Interestingly enough, in the context of the Nepalese capital market, one also cannot predict whether investors will gain or lose as they diversify their assets. And, of course, diversification is the allocation of risk and reward within an asset class. Because it’s hard to know which particular subset of an asset class or sector is most likely to outperform. In other words, it is really hard to say that the market will go into bullish or bearish trends.

Additionally, rebalancing is a method used to bring a portfolio back to its original target allocation at annual intervals. That said, to maintain the asset mix that best reflects an investor’s risk/reward profile. Otherwise, market movements could expose the portfolio to increased risk or reduced opportunities for return. For example, a portfolio that starts with an allocation of 70% equities and 30% fixed income could, thanks to a prolonged market rally, move to an 80/20 allocation which exposes the portfolio to more risk. that the investor cannot tolerate.

To conclude, on top of that, focusing on long-term strategic goals, organizational requirements, good governance and portfolio management should succeed in the end.


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