Active portfolio Management and Construction - With an investment Strategy

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    08-Feb-2017

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ACTIVE PORTFOLIO MANAGEMENT AND PORTFOLIO CONSTRUCTION IMPLEMENTING AN INVESTMENT STRATEGY

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To know how the investment made in different securities minimizes the risk and maximizes the returns.

To get the knowledge of different factor that affects the investment decision of investors.

To know how different companies are managing their portfolio i.e. when and in which sectors they are investing.

To get the knowledge of investment decision and asset allocationObjective of study

Deals with the construction and maintenance of a collection of investments.Portfolio ManagementA properly constructed portfolio achieves a given level of expected return with the least possible risk

Portfolio managers have a duty to create the best possible collection of investments for each customers unique needs and circumstances

Formulate an investment strategy based on the investment policy statementPortfolio managers must understand investor profile & the basic elements of capital market theory

Portfolio Construction

Identify the profile ofInvestor Profile

Fundamental Analysis Fundamental analysis is all about estimating the intrinsic value of a security.Conclude that price(intrinsic) of a security depends upon fundamental factor as a whole are:1. Economic Analysis2. Industry Analysis3. Company Analysis

It is base on the premises that future stock price can be predicted by studying the historical price movements. The investors who required short term benefits go for technical not fundamental who is for longer prospect.The difference charts used in technical analysis are as follows:Technical Analysis Line chartBar chartPoint & Figure ChartJapanese Candle stick Chart

ICICI BANK

Beta and Alpha of Different stocks

Expected Return of stocks on the basis of CAPM Model Return = Risk Free Rate (Beta*(Market Return Risk Free Rate

Analysis of stocks on the basis of Sharpe single Index pricing Model

Fund Allocation on the basis of Sharpe Portfolio Optimization Model

1.Never buy on rumours or market gossip.2.Before buying a security, its better to find out everything one can about the company, its management and competitors, its earning and possibilities for growth. 3. Find out the reversal, support & resistance of stock Findings and Recommendations

4. Avoid both fear and greed on the stock market. 5. Pick up the undervalued shares6. Timing of purchase and sale is also very important. buy low and sell high

7. Do not put all funds in one or two companies.8. Avoid taking undue risks or beyond the capacity of your net worth. 9.Don't buy too many different securities. Better have only a few investments that can be watched.

10. Study your tax position to known when you sell to greatest advantages. 11. Always keep a good part of your capital in a cash reserve. Never invest all your funds. 12. Don't speculate unless it's full-time job

So its time to rethinkIts time to reassessIts time to rebuild Its time to be an investor again

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