Portfolio management - Research

7/28/2019 Portfolio management - Research

1/20

RESEARCH

METHODOLOGY

RRREEESSSEEEAAARRRCCCHHH RRREEEPPPOOORRRTTT OOONNN

PPPOOORRRTTTFFFOOOLLLIIIOOO MMMAAANNNAAAGGGEEEMMMEEENNNTTT

AAUUTTHHOORRSS

HHAARRSSHH TTHHAAKKKKEERR 111111

PPOOOOJJAA TTRRIIPPAATTHHII 111133


2/20

1

EXECUTIVE SUMMARY

The evaluation of financial planning has been increased through decades, which

can be best seen in customers. Now a days investments have become very

important part of income saving. In order to keep the Investor safe from market

fluctuation and make them profitable, Portfolio Management Services (PMS) is

fast gaining Investment Option for the High Networth Individual (HNI).

There is growing competition between brokerage firms in post reform India.

For investor it is always difficult to decide which brokerage firm to choose.

The research design is analytical in nature. A questionnaire was prepared anddistributed to Investors. The investors profile is based on the results of a

questionnaire that the Investors completed. The Sample consists of 30 investors

from various brokers premises.

At the time of investing money everyone look for the Risk factor involve in the

Investment option. The Report is prepared on the basis of Research work done

through the different Research Methodology the data is collected from both the

source Primary sources which consist of Questionnaire and secondary data is

collected from different sources such as newspaper articles, business magazinesand web.

Every Individual has their own specific financial need and expectation based on

their risk taking capabilities, whereas some needs and expectation are universal


3/20

2

ACKNOWLEDGEMENT

There is a great meaning in life for those who are willing to

contr ibute- Jim England

Every research requires contribution and participation of wide arrays of

sources and resources. In the research, the authors have been lucky to be guided by

Professor. Gomathy Thyagarajan my Supervisor who has played an important role

in helping us to develop a lucid. The authors would like to appreciate the efforts of

the Supervisor for guiding throughout the whole process of research. Her

contribution has been of great acknowledgement that laid the foundation of the

research. The writers would also like to thank his family and friends for supporting

the authors throughout this interesting journey.

The University offered the authors all the desired freedom to conduct

research in a positive and enthusiastic manner that makes me appreciate their

guidance and code of conduct. The writers would like to appreciate and

acknowledge that guidance of everyone who has been an integral part of this

research process. The journey began as an individual but with the support,

cooperation and coordination of a number of people, it became a beautiful journey

embedded with beautiful memories of all the people who contributed in the success

of the research in a direct and indirect manner.


4/20

3

TABLE OF CONTENTS

Executive Summary.......1

Acknowledgements...2

CHAPTER 1: INTRODUCTION......5

CHAPTER 2: SCOPE AND OBJECTIVES.....6

2.1 Scope of the Study.......................................................................................6

2.2 Objective of the Study.....6

2.3 Problem Definition .6

CHAPTER 3: REVIEW OF LITERATURE....7

CHAPTER 4: RESEARCH METHODOLOGY.9

4.1Process of Portfolio Management .......9

4.2 Research Design .9

4.3 Sampling Design.........9

4.4 Method ofData Collection........10

4.5 Period of the Study....10

4.6 Limitation of the Study..10

CHAPTER 5: PORTFOLIO MANAGEMENT.....11

5.1 Meaning of Portfolio Management ...11

5.2 What is Portfolio Management..........11

5.3 Objectives of Portfolio Management 11

5.4 Need for Portfolio Management11


5/20

4

CHAPTER 6: DATA ANALYSIS AND INTEPRETATION12

6.1 Data Analysis Procedure ...12

6.2 Data Intepretation...12

CHAPTER 7: RESULTS AND FINDINGS....15

7.1 Results.......15

7.2 Findings.15

CHAPTER 8: CONCLUSION AND SUGGESTIONS......16

8.1 Conclusion 16

8.2 Suggestions16

BIBLIOGRAPHY .17

Books ..17

Journals ...............17

Web .17

Appendix A: Questionnaire 18


6/20

5

CHAPTER 1: INTRODUCTION

Research always begins with a purpose. For a study to qualify research, it must beplanned and systematic. Thus, the researcher needs to formalize thus plan of

pursuing the study. This framework orplan is termed as the Research Proposal.

A research proposal is a formal document that presents the research objectives,

design of achieving these objectives and the expected outcomes/deliverables of the

study. Hence, this study gives a brief idea about the investors idea and the risk

involved during the time of investment.

Investors choose to hold groups of securities rather than single security that offer

the greater expected returns. They believe that a combination of securities held

together will give a beneficial result if they are grouped in a manner to secure

higher return after taking in to consideration the risk element. That is why

professional investment advice through portfolio management service can help the

investors to make an intelligent and informed choice between alternative

investments opportunities without the worry of post trading hassles.

The objectives of portfolio management are applicable to all financial portfolios.

These objectives, if considered, results in a proper analytical approach towards thegrowth of the portfolio. Furthermore, overall risk needs to be maintained at the

acceptable level by developing a balanced and efficient portfolio. Finally, a good

portfolio of growth stocks often satisfies all objectives of portfolio management


7/20


8/20

7

CHAPTER 3: REVIEW OF LITERATURE


9/20

8


10/20

9

CHAPTER 4: RESEARCH DESIGN AND

METHODOLOGY

4.1 Process of Portfolio ManagementPortfolio management is a complex activity which may be broken down into

the following steps:

Specification of invest objectives & constraints Choice of the asset mix Formulation of portfolio Strategy Selection of Securities Portfolio Execution Portfolio Revision Performance Evaluation

4.2 Research Design

The study is about understanding the investment pattern and thepreferences/perception of investors

The research method selected for the study is exploratory research anddescriptive research.

Under exploratory research the method used is secondary resource analysis

4.3 Sampling Design

The sample that has been selected for our study is a random sample of 30respondents the reason for selecting this sample is because it was convenient

The sample selected is a true representation of the total population The sample of respondents is from the western region of Mumbai.


11/20

10

4.4 Method of Data Collection

The data for the study will be collected both from primary sources andsecondary sources.

The Primary data will be collected by means of survey that would beconducted on the sample population from the western region of Mumbai The Secondary data will be collected from Magazines and periodical journalsNewspapers Websites

4.5 Period of Study

The study was carried out for a period of one month starting from 10

th

February to 10

thof March 2013.

4.6 Limitation of The Study

The limitation of the study is that it was carried out for a limited period ofdays and the sample size selected for the study was small which not a true

representation of the total population.


12/20

11

CHAPTER 5: PORTFOLIO MANAGEMENT

5.1 Meaning of Portfolio

A portfolio is a collection of securities, since it is really desirable to invest the

entire funds of individual or an institution or a single security

It is essential that every security be viewed in a portfolio context. Thus it seems

logical that the expected return of the portfolio. Portfolio Analysis considers future

risk and return in holding various blends of individual securities

5.2 What is Portfolio Management?

Portfolio Management refers to the management of portfolios for others by

professional investment managers it refers to the management of an individual

investors portfolio by professionally qualified person ranging from merchant

banker to specified portfolio company.

5.3 Objectives of Portfolio Management:

The main objective of investment portfolio management is to maximize the returns

from the investments and to minimize the risk involved in investment. Moreover,

risk in price or inflation erodes the value of money and hence investment must

provide a protection against inflation.

5.4 Need for Portfolio Management:

Portfolio Management is a process encompassing many activities of investment in

assets and securities. It is a dynamic and flexible concept and involves regular and

systematic analysis, judgment and action. The objective of this service is to help

the unknown and investors with the expertise of professionals in investment

portfolio management. It involves construction of a portfolio based upon the

investors objectives, constrains, preference for risk and returns and tax liability.

The portfolio is reviewed and adjusted from time to time in tune with the market

conditions. The evaluation of portfolio is to be one in terms of targets set for risk

and returns. The changes in the portfolio are to be effected to meet the changing

condition.


13/20

12

CHAPTER 6: DATA ANALYSIS & INTERPRETATION

6.1 Data Analysis Procedure:

This section will give an overview of the quantitative and qualitative analysis in an

informative manner. There is no denying that both the analysis plays an important

role in the success of the research and should be showcased in an analytical and

informative manner.

The data analysis procedure is based on the data garnered from thequestionnaire and will be illustrated through qualitative and

quantitative analysis.

Qualitative Analysis- Qualitative analysis highlights the responses given bythe respondents. The descriptive responses of the respondents are analyzed

well to understand the mindset of the respondents. It need to understand that

every individual has a different mindset and opinion about people, place and

things and thus it becomes very necessary to analyze all these in an effective

and efficient manner. This will make the whole research defined and

informative. That is why qualitative analysis needs to be done effectively as

its a very crucial in guiding the authors towards a meaningful and focused

outcome of the research.

6.2 Data Interpretation

Q.1) Which field of investment interest you the most?

Mutual fundsAnnuitiesFixed depositReal estateSharesMajority of the investors preferred investing in mutual funds as mutual

funds had a low risk factor and good returns.

Other investors preferred investing more amount of money in fixed

deposit as it is secured and yields a risk free return.


14/20

13

Q.2) What is the total amount that you are ready to invest?

10,000-50,00050,0001,00,000

1,00,000-2,00,0002,00,000-4,00,00

4,00,000 and AboveThe investors were ready to invest a sum of Rs.4, 00,000/- and above in

fixed deposit as it was a risk free return.20% of the investors who were

risk averse preferred investing a low sum of money and the remaining who

were risk takers invested 2, 00,000 to 4, 00,000.Hence it was observed that

majority of the people preferred investing less amount (10,000 -50,000).

Q.3) If the investment amount falls due to bad market condition, would you

withdraw yourinvestments or wait for recovery?

YESNO90% of the investors selected NO as an option and preferred waiting for

the stock to rise rather than withdrawing their money and incurring a

loss.

Q.4) What would be the period of your investment?

Long term (more than 4years )Mid-term (2-4 years)Short term (1-2 years)

The respondents choose midterm investments as the most preferred as it

was ideal return period as compared to all investment categories

prevailing in the market.


15/20

14

Q.5) Tick the following that is applicable to you

Maximise returns on investment with maximum riskMinimise risk and investmentBalanced investments with risky and risk-free assetsOthers, please mention _________________________________The above question was given an open ended option in order to

understand the perception of the investor in a better way and hence it was

observed that 100%of the respondents choose to have a portfolio of

balanced investments with risky and risk free returns as it would give

them a balanced favourable return on their investments even during bad

times.

Q.6) What is the risk factor that you are willing to take while investing

LowMediumHigh

The above question was asked to know the risk taking ability of differentinvestors and hence it was found that out of the 30 respondents 24 of them

was risk averse and preferred a low risk investment. This shows that

people like to invest more in fixed deposits and mutual fund investments as

they are low risk bearing.


16/20

15

CHAPTER 7: RESULT & FINDINGS

7.1 Results

The optimal portfolio has been prepared, which will give optimal returns at aminimum risk to the investor

The study found out that the portfolio risk is less than individual risk onwhose basis the portfolio is constituted.

Majority of the people prefer investing taking less risk & thus theirinvestment is also low.

Investor preferred investments that would yield a return from a period of 2-4years.

7.2 Findings

During the study, following are some of the observations that are found out

When the market is doing well, investors prefer taking high risk and invest high

amount of money.

.

1.)Since the term returns from an investment refers to the benefits that aninvestor receives from that particulars investment, hence we can infer that

portfolio is generating more returns when compared to individual

2.)If risk parameter is taken in consideration; portfolio has low risk to that ofindividual risk.


17/20

16

CHAPTER 8: CONCLUSION AND SUGGESTIONS

8.1 Conclusion

The research has been presented by setting objective along with developinga systematic approach to achieve those objectives. The aims and objectives of the

research have been covered through wide arrays of research tools. The research has

been conducted in a professional manner. It can assume that the objectives have

been achieved in a positive, honest and ethical manner. The overall objectives were

well aligned with the achievement and thus helped in bringing the true and ideal

picture of the research.

8.2 Suggestions

Following are some of the suggestions:

In order to enjoy more returns, he should invest more; investor should investin more risky securities as a risk taker

Investors should invest in different securities rather than investing in onlyshares.the investors portfolio should include both risk free as well as risky

returns.

If the investor is a risk-averse investor, then he should invest in less riskysecurities and enjoy normal return.

Investors should hold on to the security rather than selling it and making aloss when the share prices are down.


18/20

17

BIBLIOGRAPHY


19/20

18

APPENDIX

QUESTIONNAIRE

Name:-

Age:-

Sex:-

Occupation:-

Q.1) Which field of investment interest you the most?

Mutual funds

AnnuitiesFixed deposit

Real estateShares

Q.2) What is the total amount that you are ready to invest?

10,000-50,00050,0001,00,0001,00,000-2,00,0002,00,000-4,00,004,00,000 and Above

Q.3) If the investment amount falls due to bad market condition, would you

withdraw yourinvestments or wait for recovery?

YESNO

Q.4) What would be the period of your investment?

Long term (more than 4years )Mid-term (2-4 years)Short term (1-2 years)


20/20

19

Q.5) Tick the following that is applicable to you

Maximise returns on investment with maximum riskMinimise risk and investmentBalanced investments with risky and risk-free assetsOthers, please mention _________________________________

Q.6) What is the risk factor that you are willing to take while investing

Low

MediumHigh

Documents

Portfolio management - Research