Goals of a portfolio
Portfolio is built by buying stocks, bonds, mutual funds or by buying other investments. The main goal is to look for strategies of increasing the value of the portfolio by choosing investment that you believe will grow in price. The portfolio should provide regular income with low volatility. The portfolio should provide income and also allow the long term growth of your investment. The portfolio should be incurring low risk. The size of the portfolio also counts since it calls for a different level of review. One also should evaluate how much returns he is getting back. He should know how much taxes are imposed and what is remaining after the taxes and in general the inflation rate.
The investment style
Investment style refers to the different style features of equities, bonds within a given investment. The investment style that one uses helps him in setting up expectations for long-term strategies. The investment style that I can employ is the Top-Bottom line investment style or the bottom–up investment style. This is because they are appropriate and comfortable for holding for long term.
Benchmark index for the performance assessment
A benchmark index always gives an investor the point of reference when evaluating the performance of the funds. When comparisons are made there should be an index which can be used a reference commonly called the basic benchmark. The world accepted benchmark is the S&P 500 index for the overall stock market. When one want to monitor and evaluate the results of the individual holding he compares the results to the sectors and the industries.
Asset allocation
Asset allocation is an investment strategy. Its main aim is to balance risk and the return by evaluating a portfolio’s assets according to the goals and risks anticipated to occur. The most important thing that one should do in asset allocation is determining what he actually owns. The he should involve a financial adviser to show him how to hand the financial allocations.
