NEED FOR PORTFOLIO REVISION
An individual at certain point of time
might feel the need to invest more
. The need for portfolio revision arises when an individual has some additional money to invest.
Change in investment goal
also gives rise to revision in portfolio. Depending on thecash flow, an individual can modify his financial goal, eventually giving rise to changesin the portfolio i.e. portfolio revision.
Financial market is subject to risks and uncertainty. An individual might sell off someof his assets owing to fluctuations in the financial market.
PORTFOLIO REVISION STRATEGIES
There are two types of Portfolio Revision Strategies. The choice depends on the investor’sobjectives, skill, resources and time.
1.Active Revision Strategy
Active Revision Strategy involves
in an existing portfolio over acertain period of time for maximum returns and minimum risks.Active Revision Strategy helps a portfolio manager to sell and purchase securities on aregular basis for portfolio revision.It is based on analysis of technical factors and fundamental factors.Frequency of trading is much higher resulting in higher transaction cost.It is holding securities based on the forecast about the future. The portfolio managersvary their cash position or beta of the equity portion of the portfolio based on themarket forecast.
IT or FMCG industry stocks may be given more weights than their respectiveweights in the NSE-50.