Price to Sales Ratio – Formula, Meaning, Assumptions and Interpretation
Formula Price to Sales Ratio = Current Market Price / Reported Sales Revenue Many companies state their revenue after removing the effects of onetime events whereas others continue to state the revenue without any adjustments. Meaning The price to sales ratio tells an investor how many dollars they are paying for every dollar that the […]
The Endowment Effect
The endowment effect is another important psychological barrier that helps people from realizing the full potential value of their investments. Like other cognitive biases, it obscures the thinking of the investor and gets them to make decisions, which can be described as “suboptimal,” to say the least. In this article, we will have a look […]
Financial Planning – Definition, Objectives and Importance
Definition of Financial Planning Financial Planning is the process of estimating the capital required and determining it’s competition. It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise. Objectives of Financial Planning Financial Planning has got many objectives to look forward to: Determining capital requirements- […]
What are Fixed Income Securities?
Fixed income securities used to be a relatively obscure part of the financial markets. Up until the late 1970s, bond markets were used by wealthy individuals, corporations, and even governments to park large sums of money in low-risk-low return securities. Since these bonds were mostly issued by sovereign authorities, they were considered to be one […]
Cashless Economy: Pros and Cons
Governments across the world have stepped up their fight against cash. Cash is being increasingly viewed as a curse that mankind needs to rid itself of. The goal is to move towards a cashless economy. The closer an economy is towards this goal, the more successful it is considered to be. However, the concept of […]
It is essential for individuals to invest wisely for the rainy days and to make their future secure.
A portfolio refers to a collection of investment tools such as stocks, shares, mutual funds, bonds, cash and so on depending on the investor’s income, budget and convenient time frame.
Following are the two types of Portfolio:
The art of selecting the right investment policy for the individuals in terms of minimum risk and maximum return is called as portfolio management.
Portfolio management refers to managing an individual’s investments in the form of bonds, shares, cash, mutual funds etc so that he earns the maximum profits within the stipulated time frame.
Portfolio management refers to managing money of an individual under the expert guidance of portfolio managers.
In a layman’s language, the art of managing an individual’s investment is called as portfolio management.
Portfolio management presents the best investment plan to the individuals as per their income, budget, age and ability to undertake risks.
Portfolio management minimizes the risks involved in investing and also increases the chance of making profits.
Portfolio managers understand the client’s financial needs and suggest the best and unique investment policy for them with minimum risks involved.
Portfolio management enables the portfolio managers to provide customized investment solutions to clients as per their needs and requirements.
Portfolio Management is further of the following types:
An individual who understands the client’s financial needs and designs a suitable investment plan as per his income and risk taking abilities is called a portfolio manager. A portfolio manager is one who invests on behalf of the client.
A portfolio manager counsels the clients and advises him the best possible investment plan which would guarantee maximum returns to the individual.
A portfolio manager must understand the client’s financial goals and objectives and offer a tailor made investment solution to him. No two clients can have the same financial needs.
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