SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT

Security Analysis and Portfolio Management

Introduction

Security analysis is the analysis of a variety of financial instruments which can be easily tradable. It helps in determining the value of the asset on the basis of which a financial expert or a security analyst can make their decisions. It involves the expectation of future dividends, share price of the asset. Today, security analysis is dependent on the basic analysis of the security, which leads to the intrinsic worth of an asset and also analyzing risk and return depending on the safety of funds and the projections of the future returns, variability of the returns, covariance.

Portfolio management is the art of science in making effective decisions related to investments and investment policies and develop such type of portfolio which will achieve the objectives of the investor and keep reducing the risk of the investor. The importance of portfolio management is that it guides an investor how he/she can get a good return and what will be the techniques which will reduce or eliminate your risk (Smithson, 2003, p. 91).

Every investor want maximum return and face as much as possible low risk. This can only be happen if you appoint a portfolio manager who will take your investment and invest in such companies which will fulfill your investment objectives. Portfolio managers are effective and efficient people who sit in the capital market and see the up and down of the share prices of different shares of the company. The main role of portfolio managers is to make investment in such profitable sectors which will generate some return to the investor. Sometimes investors restricts the portfolio manager to only invest in some business sectors, a portfolio manager use his efficiency and make effective use of the resources and according to the instructions of the investor.

Responsibilities Performed By Portfolio Manager:

Portfolio manager has to perform various types of tasks and roles which are described in detail.

As an analyst/advisor:

Portfolio manager always suggest new investments, analysis of the existence one, indentify the intended objectives and recommend highly yield securities.

Analysis of market and economic surveys:

It is very imperative for urging highly yield securities, portfolio manager must have to examine the current physical properties, budget proposals, industrial policies and economic situation of the country. He is also supposed to shed the light on the credit policy, growth of industry, foreign exchange positions and alteration in corporate laws etc (Reilly, 1985).

Financial Analysis

Portfolio manager update himself abreast with the new changes in financial market. He always comes up with best plan with minimum risk involved and high profits. He always shares everything with his clients.

Study of Stock Market

Portfolio manager must have depth know how of the stock market. He must see inclination of different country's stock exchanges and also analyze scripts. So in this way he would be able to make out the right yield securities for investments.

Plan customize investments solutions

He is always accountable for manipulating modified investments solutions for his clients. Two individuals can not have the same ...