This thesis provides a review of the essential measures of portfolio performance methods, Weaknesses and differentiates between traditional performance measures
In this paper, readers will have the overall information about different aspects of portfolio risk management, the role of diversification in investment and also the objective of this thesis is to figure out the profitability in stock investment
Through portfolio risk management more this paper provides a review of the methods for measuring portfolio Performance and the evidence on the performance of professionally managed investment portfolios. Traditional performance measures, strongly influenced by the Capital Asset Pricing Model of Sharpe This research aims to test the ability of many of models to predict the performance of investment portfolios
Active portfolio managers try to “win the market” by identifying over- and undervalued stocks. They invest in the securities they consider to be undervalued and in some cases short-sell the ones they believe are overvalued.
By contrast, unfavorable fund managers take over a buy-and-hold strategy in which their main goal is to copyist the performance of a market index
“Portfolio measurement has not only the goal to inform about the quality of a portfolio performance but and that’s even more important to decompose and analyze the success factors of a portfolio”
A portfolio is a mix of securities chosen from a vast universe of securities. Two variables determine the installation of a portfolio; the first is the securities included in the portfolio and the second is the proportion of total funds invested in each security.
The purpose of portfolio performance measurement is to assess how well a fund manager has performed relative to a benchmark. In order to do this, we need to calculate the ex post returns on the portfolio and then adjust these returns for the risk exposure assumed by the fund manager. These risk-adjusted returns can then be compared against the benchmark. We can also identify to principal sources of the fund manager’s performance, namely the return from market timing and the return from stock selection.
The strength of an investor’s portfolio may determine when she can retire, how much income she has and what decisions about investing she should make in the future. But collect and managing a effective portfolio is no easy mission. Before you can understand your portfolio, you need to know what goes into it and what your investment goals are.
Portfolio is simply a collection of investments. A business or financial structure may have an investment portfolio, but in most cases a portfolio refers to the investments that an individual owns at any given time. To start a portfolio, you must purchase or receive as gifts more than one type of investment product. These maybe contain cash, stock, bonds, mutual funds, certificates of deposit and commodities futures, among other investments
Portfolio management presents the best investment plan to the individuals as per their income, budget, age and ability to undertake risks.
Portfolio management reduces the risks engaged in investing and also raise the chance of making profits.
The goal of a portfolio is to create a source of investment income and growth while keeping the initial value of investments intact. There are numerous strategies to reach this goal. Most portfolios aim to balance risk by including extremely volatile investments, for example stock, with more conservative, secure investments, such as bonds and cash. Diversification indicates to the basic strategy of spreading out the value of a portfolio over many different investments so growth in just one of the investments will mean a profit for the portfolio as an entire.
People can choose to manage their own portfolios by buying and selling investment products as they choose. In other cases, people hire portfolio managers or financial planners to study their investments and make recommendations about how to invest in the future. Some portfolio management is really active and covers buying and selling investments quickly. However, some investors prefer to set up a portfolio and allow it to remain largely unchanged over time. The costs related with managing a portfolio are mostly tax deductible as investment cost.
Investors have many tools at their disposal for tracking and analyzing a portfolio. Software programs allow investors to track the value of individual investments and compare them to similar investments to determine whether they are successful and worth keeping. These programs also project future income and growth based on market trends and past performance. Consulting with professionals and learning about different forms of investments that you might not already own are extra tools for understanding your portfolio and being ready to make deductive management resolution.
1. Theoretical background
1. Software for investors:
A. Stock Market Eye: this application uses for portfolio management, for asset managers and individual investors. It is easy and Works on Windows, Mac, iOS & Android. Portfolios, watch lists, charts, alerts + more. StockMarketEye makes it easy to keep track of multiple investment portfolios and monitor the markets to effectively manage your investments. Data is stored locally on computer, but can be shared between users with inserted on-line sync service.
B. Advisor: is a high function desktop application for Financial Advisors to manage the relationship with investor clients in a collaborative manner, handle more clients professionally with less effort through direct access to all portfolio information and history, provide full Portfolio Management facilities including corporate actions and income tracking, produce advanced reporting, generate sophisticated Return