PORTFOLIO MANAGEMENT

Portfolio Management and Corporate Social Responsibility

Portfolio Management and Corporate Social Responsibility

Introduction

Portfolio management is a conglomeration of values as a whole instead of individual holdings unrelated. Portfolio management highlights the range of values for inclusion in the portfolio on the basis of the contribution that the safety of the portfolio as a whole (David¸2000, 16).

This ends that some synergy or some interaction between the results of securities in the portfolio overall effect is something more than the sum of its parts. When securities are combined in a portfolio, the portfolio's return is the average of the yields of securities in the portfolio. For example, if a portfolio was composed in equal positions in two securities, whose yields are 15% and 20%, profitability of the portfolio, will be the average of the yields of the two securities in the portfolio, or 17.5 %. From this we will discuss the process of creating a diversified portfolio. The diversified portfolio is an investment theory that reduces the risk of losing all their money when "all the eggs" are not in one basket. Diversification limits your risk of a long term; it can improve its overall performance. This is achieved by placing assets in several categories of investments. Portfolio process

The portfolio process is as follows: 1. Designing an investment objective; 2. Develop and implement a combination of assets; 3. monitoring of the economy and markets; 4. Adjusting the portfolio and performance measurement

Due to the intensity of each of the four elements, we will be covering only the first two.

Investment Objective

This subject is vast and contains three major divisions. The objectives of the foundation, constraints and objectives. Foundation Objectives: These targets generally receive the most attention from investors and are determined by the complete determination of their needs, preferences and resources. Return - you need to determine whether you prefer a return maximization strategy, where assets are invested to make the best possible performance during his stay at the level of risk tolerance, or if a required minimum return is certainly preferable, generating return just as much emphasis on risk reduction.

Risk

There are many ways to assess the risk tolerance of a particular investor, the least savvy of the investments to sophisticated investors. In addition to the risk you are willing to take, there must be a measure of risk associated with each title is considered for inclusion in the portfolio. It is important to recognize the difference between the individual security risk and the risk of the portfolio as a whole. The risk of a portfolio is less than the average risk of their holdings; risk tolerance should correspond to the total portfolio risk and not to the risk of each security. Inflation

Although a certain degree of protection against inflation is necessary, to the extent will vary depending on the time horizon and the goal of using the portfolio to generate income for future cash consideration. Whereas someone with a short-term strategy for trade and interested in maximizing ...