How To Select Investment Portfolio Securities?

How To Select Investment Portfolio Securities?

Advertisement   SELECTING THE SECURITIES: Once the objective of the portfolio is determined the securities to be included in the portfolio must be selected. For bond portfolio this task is not difficult. Normally, the portfolio is selected from list of high-quality bonds that the portfolio manager has at hand....

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What Are The Weighing Constraints of Investment Portfolio?

What Are The Weighing Constraints of Investment Portfolio?

  WEIGHING CONSTRAINTS: The last stage in determining portfolio policies is to establish the constraints on the portfolio. This involves weighing each constraint individually and determining its importance by using a ranking scale. We can use a ranking scale of one to five for each constraint. A low ranking...

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What Are The Principles of Constructing An Investment Portfolio?

What Are The Principles of Constructing An Investment Portfolio?

PRINCIPLES OF PORTFOLIO CONSTRUCTION:   The portfolio manager has to follow certain principles while constructing a portfolio. These principles are as follows:     SAFETY PRINCIPLES: The safety principle means that the portfolio must maintain its principal value in the event of forced liquidation. Normally, the investor does not...

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How To Formulate Investment Portfolio Objectives?

How To Formulate Investment Portfolio Objectives?

  FORMULATING THE PORTFOLIO OBJECTIVES:   The portfolio objectives can b determined by ascertaining the constraints on a portfolio. The greater the number of constraints and the more bindings these constraints, the more conservative the portfolio must be.     The following are the six possible portfolio constraints which...

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Write A Note On Collecting Basic Data of Investment Portfolio

Write A Note On Collecting Basic Data of Investment Portfolio

  COLLECTING THE BASIC DATA:   Initially, the portfolio manager has to devote a great deal of attention to basic consideration such as pension plans, life insurance and educational funds for children. Usually, the basic needs must be satisfied before making an investment programme. Every individual investor has a...

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What Is The Meaning of Portfolio Composition?

What Is The Meaning of Portfolio Composition?

  PORTFOLIO COMPOSITION:   The principal objective of the traditional approach is to select the portfolio of securities that most appropriately meets the investor’s needs. The investor will attempt to maximize expected return subject to the level of risk involved. The first step is to obtain the pertinent facts...

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What Is The Markowitz Approach To Constructing Portfolio?

What Is The Markowitz Approach To Constructing Portfolio?

  Markowitz Approach to constructing portfolio: Markowitz Approach provides a systematic search for optimal It enables the investors to locate minimum variance portfolio i.e. portfolio with the least amount of risk for different levels of expected return. It is the process of combining assets that are less than perfectly...

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What Is The Interior Decorating Approach to Construction of Portfolio?

What Is The Interior Decorating Approach to Construction of Portfolio?

Interior Decorating Approach to Construction of Portfolio: Interior decorating approach is tailor-made to the investment objectives and the constraints of each investor. In case of exterior building or room structure, the furnishing and interior decoration to be carried out inside the structure will depend upon the purpose for which...

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What Is The Meaning of Portfolio Construction?

What Is The Meaning of Portfolio Construction?

CONSTRUCTION OF PORTFOLIO:     Portfolio construction means determining the actual composition of portfolio. It is critical stage because asset mix is the single most determinant of portfolio performance. Portfolio construction requires knowledge of the different aspects of securities. The components of portfolio construction are:   Asset allocation meaning...

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What Are Objectives of Portfolio Management?

What Are Objectives of Portfolio Management?

OBJECTIVES OF PORTFOLIO MANAGEMENT:   Stability of income: An investor considers stability of income from his investment. He also considers the stability of purchasing power of income.   Capital growth: capital appreciation has become an important investment principle. Investors seek growth stocks which provide a large capital appreciation by...

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