Types of Portfolios

13 &19
Portfolio Management
Portfolio management is all about strengths, weaknesses,
opportunities and threats in the choice of debt vs. equity,
domestic vs. international, growth vs. safety, and many other
tradeoffs encountered in the attempt to maximize return at a
given appetite for risk with your funds.
Associated Terms
Asset allocation
Multi-objective optimization problem
Pareto-optimal portfolio.
Designing a portfolio
STYLE
APPROACH
CATEGORY
CATEGORY APPROACH STYLE
Aggressive
Defensive
Income
Speculative
Hybrid

Long-term
Mid-term
Short-term
Large- cap
Small cap
Government
Corporate
Inflation protected
Precious metals
Growth
Tax efficiency
Active
Passive
Top down
Bottom top

Aggressive Portfolio
Includes those stocks with high risk/high reward
proposition.
Stocks in the category typically have a high beta.
Beta (Tendency of a security's returns to respond to swings
in the market)
Guidelines for a sound
Aggressive Portfolio
Look online for companies with earnings growth that are rapidly
increasing .
The most common sectors to scrutinize would be technology
Keeping losses to a minimum and taking profit are keys to
success in this type of portfolio.
Defensive Portfolio
A portfolio that includes both defensive & cyclical stocks.
Defensive stocks remain stable during the various phases
of the business cycle.
Cyclical stocks, on the other hand, are those that are most
sensitive to the underlying economic "business cycle.

Income Portfolio
Focuses on making money through dividends or other
types of distributions
Income portfolio should generate positive cash flow
Real estate investment trusts (REITs) and master
limited partnerships (MLP) are excellent sources of
income producing investments.
Guidelines for a sound
Income Portfolio
Be on the lookout for stocks that have fallen out of favour
and have still maintained a high dividend policy.
These companies not only supplement income but
provide capital gains.
Utilities and other slow growth industries are other ideal
sources.


Speculative portfolio
A collection of high-risk securities
chosen in the hope of producing high
profit
Hybrid Portfolio
Such a portfolio includes investments like
- Bonds
- Commodities
- Real Estate & Art
Would contain blue chip stocks and some high
grade government or corporate bonds.
Inflation Protected
True inflation fighters are ones that:
Pay dividends
Have regularly increased their dividends
Look capable of continuing to increase those dividends
Are reasonably priced in the market
Have the financial strength to persevere, even during rough
economic conditions

The active approach seeks to take advantage of inefficiencies in the market and is
typically accompanied by higher-than-average costs (for analysts and managers
who must spend time to seek out these inefficiencies).

Passive asset management is based on the belief that:
Markets are efficient.
Market returns cannot be surpassed regularly over time.
Low-cost investments held for the long-term will provide the best returns.
Active & Passive
Portfolios
Diversification is Key
You dont have to put all your eggs in one basket which
ultimately helps mitigate risk.
Leads to better performance or return on investment.
Thank You!
Bradley,13 & Michelle, 19