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Managing Your Portfolio and Assets

December 25, 2012  by: ushakiran  Points: 20   Category: Investment    Views: 653

In managing our portfolio we need to keep all the objectives in mind before deciding where to put our money. Other important factors to be kept in mind would be the risk you are prepared to bear, liquidity , tax liabilities etc..

         

Portfolio management



It does not help you make a fast buck and spend it all but helps balance your future returns and risks and provides a steady return on your investments, thus insulating you from a spectacular fall or steep rise of your fortunes. You have to evaluate the performance of your portfolio on a continuous basis and make appropriate changes as and when necessary.The answer lies in effective portfolio management - which in the broadest term,means management of your money.

The financial world has many exciting avenues of investment and one should try and get as much as possible out of ones money.One has to make long term plans to counter inflation and prevent your capital from being eroded. While managing ones portfolio one has to take many things into consideration and if possible gain as much knowledge s possible about the various options that are available. A personal knowledge goes a long way in making it easier.

Portfolio management is not about making a fast buck but helps you balance your returns and risks and provides a steady return on your investment thus insulating you from any sharp rise or fall of fortunes.

We all agree that saving is a must, but then after saving a considerable sum of money what do you do with your savings? One can say that it is easier to keep it in a fixed deposit in a bank account and earn interest. Agreed that a bank deposit is the easiest and safest form of investment one can make.But the same money put in company deposits will earn more interest and will give you better results thereby taking care of the inflation .A simple fixed deposit in a savings bank is not able to do this.

How to counter inflation and prevent our capital being eroded



A logical way is to ensure that your investments yield a return that is above the rate of inflation.The answer lies in effective portolio management - which in the broadest term,means management of your money. Our portfolio can include investments in any form - property , gold, silver, precious stones, investing in art and antiques - anything that you buy with future gain in mind.

According to experts , An intelligent and practical portfolio would ensure a mix of various investments and prevents all your money from being poured into a single form of investment. Every investment carries some inherent risk or the other.If for example tomorrow if Gold prices were to suddenly come down, a mixed portfolio would prevent your savings from dwindling away along with the falling price of gold.Only that part of your saving that is invested in gold will suffer a loss. Similarly, when property prices soar you would gain to the extent that your money is invested in property. So here, the wise quote ' Don't put all your eggs in a single basket ' really makes sense.

Portfolio management therefore does not help you make a fast buck but helps balance your future returns and risks and provides a steady return on your investments, thus insulating you from a spectacular fall or steep rise of your fortunes. You have to evaluate the performance of your portfolio on a continuous basis and make appropriate changes as and when necessary. This way you are making sure that everything is in order .

To do this, you need to have an objective and this could vary from person to person, also depends on status, age and requirement. A retired person , normally has fulfilled most of his /her responsibilities regarding children and family and would require a steady income from his/her investments, while a young unmarried person would be interested in see their savings grow even if there is no immediate income.These are two extreme cases.One may be saving to buy something or for children's future education, building a house or simply having a considerable amount of bank balance.These objectives can also change with time and after a period of time when priorities change , one should be able to accordingly change one's portfolio to suit one's needs at that particular time. This is what a good portfolio management is about.

In managing our portfolio we need to keep all the objectives in mind before deciding where to put our money. Other important factors to be kept in mind would be the risk you are prepared to bear, liquidity , tax liabilities etc;




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