Investment and Portfolio Management Essay Sample

Even in today’s time when the Stock market is no longer an odd term, most people understand it very little. Therefore in this sample essay, we will be looking at investment and portfolio management in detail.

We will discuss all the points you need to understand this concept, including types of investment and portfolio management, factors, what is investment and portfolio management and the types.

Therefore we will start by knowing what portfolio management is.

What is Investment and Portfolio Management?

It is the process of analyzing different opportunities in order to select and form a suitable mixture of investments for obtaining the best possible outcome. Investment and portfolio management also includes time to time revision and changing of the current portfolio to adapt to the situation.

Nevertheless, there are various types of portfolios out there. Which we will be mentioning below

Investment Portfolio Types

• Aggressive Portfolio: This type of portfolio holds risky investments with the goal of achieving high profit in a short period of time.
• Defensive Portfolio: Stocks of lower risk level and stable profit are held in this type of portfolio.
• Hybrid Portfolio: as the name suggests this type of portfolio consists of both of the above. This means that it has a mix of high-risk and low-risk stocks.

Factors influencing investment and portfolio management

Investment and portfolio are planned with keeping in mind the various factors that may affect it. These factors which affect Investment and Portfolio Management are as follows:

Time Span:

The type of investment depends upon the time period of investment.

The longer time period in stocks is related to higher returns.

Age of Investor:

The age of investors is a decisive factor as young investors are more likely to be involved in risky investments as compared to older ones who are experienced and try to play it safe.

Risk Tolerance :

Risk tolerance refers to how much loss can investors suffer comfortably. Investors with lesser capital to spare are less risk-tolerant.

Strategies for investment and portfolio management

As we say above there are several types of investors and portfolios. We also saw the factors that affect investors. Now let us see what are strategies used by investors in Investment and Portfolio Management.

Value investing:

It says that one should buy stocks when they are at a discount or lower price as compared to their true value.

This is because purchasing the stock at a higher price will reduce long-term profit and increase the chances of losing money.

Contrarian Investing:

This strategy is based on the concept of not following the crowd. If most of the investors are moving in the same direction one should look at the opposite one and try to get stocks with potential at a bargain price.

Growth at a Reasonable Price:

Investors who follow this strategy invest in growth-oriented companies but avoid the overvalued stock.

Growth Stock Investing:

This strategy says that you should invest in companies with a higher growth speed than average regardless of price.

Conclusion

With this, we conclude our essay on the topic of Investment and Portfolio Management. After going through this essay you have understood the concept and basic terms related to it.

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