A portfolio is a group of investments. A well-managed portfolio is diversified to ensure a continuous return on investment over time.
Portfolio Management Policies
There are three major portfolio management policies:
- Aggressive policy: Often called capital appreciation, this is for investors who want their portfolios to grow over time. Typically, these investors are younger and have enough earned income per year to handle current expenses.
- Defensive policy: Often called capital preservation, this approach minimizes the risk of loss inherent in an aggressive policy, but it also has little upside potential.
- Balanced policy: Often called total return, this is similar to an aggressive policy, but it considers dividend and interest income as important components alongside capital gains.
Of the 250 questions on the Series 7 exam, 21 will focus on the critical function: "Monitors the customer's portfolio and makes recommendations consistent with changes in economic and financial conditions as well as the customer's needs and objectives."
Financial AdvisorLearning how to build these portfolios will increase your investing confidence and give you financial control.
Personal FinanceDiscover the duties and responsibilities of a portfolio manager, along with education, training and skills requirements, and salary expectations.
Managing WealthMinimizing risk while maximizing return with the right mix of securities is the key to achieving your optimal asset allocation.
Financial AdvisorHere is what needs to be considered when deciding between an income or total return approach to withdrawals.
RetirementWe will design a portfolio that should balance the requirements of liberal income with sufficient liquidity to withstand down markets.
Personal FinancePortfolio analysts have the exciting role of working between the investment team layers and they touch various aspects of an investment organization.
InvestingHow do you build an optimally balanced portfolio? A lot depends on your appetite for risk, and your understanding of rebalancing.
InvestingDo you have the best mix of investments? Find out how to make sure.