RISK is defined as the probability of an event and its consequences.

 the change of harm or loss (PROBLEMA) na pwedeng mangyayari sa business mo.

WHAT IS RISK MANAGEMENT?

 Risk management can be defined as forecasting and evaluating risks to the organization,
determining impact (financial, brand, people, etc.) and identifying steps to avoid or
reduce their impact.
 Risk Management Involves the management of unpredictable events that have
adverse consequences for a firm.
EXPLAINATION: Ito yung way of evaluating potential negative events na mangyayari sa business
or company mo and kung ano yung impacts non. With the help of this you can create steps
Kung pano mo haharapin at poprotektahan yung business mo against don sa mga risk na
kakaharapin mo. Mas madali mong masusulusyunan agad yung mga possible risk na darating.

Importance of Risk Management

 Risks management is an important process because it empowers a business with the

necessary tools so that it can adequately identify and deal with potential risks. Once a
risk’s been identified, it is then easy to mitigate it. In addition, risk management
provides a business with a basis upon which it can undertake sound decision-making.
EXPLAINATION: Importante to dahil malalaman at magagawan mo agad ng solutions yung mga
possible risk na haharapin mo or ng business mo, kpag may risk management ay mas madaling
malaman kung ano yung mga risk at magiging epekto nito at kung ano ang way mo para
maiwasan at malagpasan yon.
If malalaman mo kasi agad yung mga possible threat na mangyayari sa business no ay baka
maging opportunity mo yun para mas maging successful yung business mo
Halimbawa: Magkakaroon ka ng competitor sa same location kung saan naka locate yung
business mo, Threat yun sayo. and then with the help of this risk management para hindi ka
masapawan ng competitor mo is gagawa ka na agad ng way kung paano ka mas mangingibabaw
dun sa business na yon. It’s either magmark down ka or magkakaroon ka ng promo na wala don
sa isang business na yon.
THE RISK MANAGEMENT PROCESS

 The risk management process is the set of steps you should be taking routinely,
habitually, to assess and mitigate the hazards present in your organization and lines of
business.
 It needs to be a cycle because it can take several iterations to get where you need to be
and also because things change over time. Risk management and mitigation is not a
project, but an ongoing aspect of resiliency.
 Most organizations should assess their risks at least once a year, depending on the rate
of change in their organization, field, and environment.
EXPLAINATION: Itong process nato ay magiging set of practice niyo na the whole org. and the
whole years or months kung gaano man tumagal yung business niyo. Kasi makakatulong to to
access and know the risk and how to lessen or reduce that risk na kakaharapin of your whole
organization or business.
The 6 Steps of the Risk Management Process

We’ll talk more about each step below.

Step 1: Assessing your risks

 Everything in risk management starts with risk assessment: Dito eexamine mo yung mga
factors to your organization and in your environment that are potentially dangerous to
your business. And dito
 You think about everything that has the potential to take your organization down.
 Natural disasters are part of this but mas marami pang mga risk na pwede mo pang
kaharapin na mas Malala jan.
Step 2: Evaluating your risks

 Once na meron ka ng list ng mga risk na assess mo sa step 1, syempre you need to
evaluate them.
 Dito makikita mo agad on How using the risk mitigation process can bring significant
benefits to the organization or business.
Step 3: Figuring out your risk profile

 Dito kailangan mong ifigure out the risk profile, or rather the senior management’s risk
profile. This is all down to them. It’s about how much risk they are prepared to live with.
 The Risk appetite and risk tolerance both are refer Kung Ilang risk and kung paano ito
haharapin ng organization at dito makikita kung gaano sila ka prepared in pursuing of
their objectives.
 Risk appetite is a broader statement of the level of loss exposure that management
deems acceptable, given its objectives and resources. An organization with a high-risk
appetite might accept a high insurance deductible or even go without insurance. An
organization with substantial financial reserves might have a high appetite for risk.
 Risk tolerance is a narrower view of the specific level of risk the company will accept,
setting an acceptable level of variation from its risk appetite surrounding specific
objectives that the company is willing to tolerate.

Step 4: Choosing your risk strategies

 Once na nalaman niyo na on how much risk management is prepared to accept, you can
start choosing a risk mitigation strategy for each significant risk.
o There are four of them:
1. Avoid the risk- Exit activities that bring on the risk.
2. Reduce the risk – kailangan mong mag Take ng steps to reduce the possibilty of a
negative event na mangyayari.
3. Share the risk – Dito naman you need to Take out insurance to help cover the risk.
4. Accept the risk- Simply live with the risk, Accept and bear the consequences.
Step 5: Executing your risk strategies
 Implement or perform the strategies you decided on in Step 4.
Step 6: Measuring residual risk
 This is the last step.
 Residual risk refers to how much risk is left over after you have adopted your risk
mitigation strategies. the measuring the amount of risk na natira after mo gawin yung
step 1-5.
 Sa steps na to is dito mo malalaman if your risk mitigation strategies were successful.
 Pwede naman mag add ng pang & step ayun ay Go back and Do it all over again.
since things are always changing, in business, life, and the larger environment, and
you need to continually review to stay current and protected.

RISK MANAGEMENT EXAMPLES

 Si investor A ay bibili ng stocks sa Bagong tayo na Company na may Higher value

compared sa ibang company with the same industry,na Kahit alam niya na Malaki yung
chance na biglang bumaba yung price at malugi siya tinuloy niya pa rin. So Dito Nag take
siya ng risk and Risk acceptance is displayed despite of the threat na pwede niyang
kaharapin.
*THE SOURCES OF RISK WILL DISCUSS BY OTHER MEMBERS OF OUR GROUP.

PORTFOLIO MANAGEMENT

What is Portfolio?
 dito nakaindicates yung mga security tulad ng stock, bonds, commodities, cash, and cash
equivalents.

EXPLAINATION: Sabi nga nila, “Don’t Put all your eggs in one basket”. Dito with the help
of Portfolio, it reduces the risk without sacrificing return.

Portfolio Management
 Ito yung process na kung saan nakakatulong para-Yung investments mo ay mas less sa
risk and mas profitable or rewardable.
 And This is also a key skill that requires for managing your investment effectively.

Who is a Portfolio Manager?

 Si Portfolio manager yung tumutulong sa mga gustong mag invest and wala sila
masyadong alam in terms of investing. And sila din yung nag gaguide para ma achieve ng
clients nila yung Goals na gustong mangyari ng client.

Phases of Portfolio Management

 Ito yung process sa Portfolio management that aims is to make the best or most effective
investment.
Five phases can be identified in the process:

1. Security Analysis.

 This is the initial phase of the portfolio management process.

 There are many types of securities available in the market including equity shares,
preference shares, debentures and bonds.
 Ito yung phased na kung saan involves naman dito yung Evaluation and analysis ng Risk
return Of individual securities.
 The basic approach for investing in securities is kapag nag benta ka ng overprice
securities and bibili ka naman underprices securities.
2.Portfolio Analysis

 A portfolio refers to a group of securities that are kept together as an investment.

 Dito yung mga investors gumagawa sila ng investment to enlarge the investments to
make it the risk adverse.
 Dito involves na yung calculation of return and risk ng bawat portfolio.
3. Portfolio Selection

 In this phase Yung portfolio dito ay selected na.

 Yung pinaka main taget dito sa Phases na to is to build a portfolio that offer highest
returns at a given risk.
 So Yung mga Portfolio na nag poproduce ng Good returns at a level of risk ay tinatawag
na Efficient Portfolios.

 Kapag Yung set of efficient portfolios is already formed, the optimal portfolio is chosen
for investment.
  The optimal portfolio is determined in an objective and disciplined way by using the
analytical tools and conceptual framework provided by Markowitz’s portfolio theory.
4. Portfolio Revision

 After mo mamili ng optimal portfolio, yung investor is Required na mag monitor para
masigurado that the portfolio remains optimal with passage of time.
 So dahil nga Maraming changes sa economy natin and financial markets. Hindi mo rin
masisigurado kung yung return ba is maayos o hindi. Kung profitable pa ba.
 So dahil sa mga possible conditions na yon , yung investor ay kailangang Gumawa o
magkaroon ng Portfolio revision by Buying a new securities and selling the existing
securities.
 As a result of portfolio revision, the mix and proportion of securities in the portfolio
changes.
5. Portfolio Evaluation

 Dito sa phase na to involves na dito yung mga regular analysis and assessment of
portfolio performances in terms of risk and returns over a period of time.
 During this phase, the returns are measured quantitatively along with risk born over a
period of time.
 Yung performance ng portfolio is compared with the objective norms and this procedure
assists in identifying the weaknesses in the investment processes.

Benefit of Portfolio Management

*Based on my research, these are some Benefits of Portfolio Management.

 Investors make informed decision – Maiinform yung mga investors and makakatulong
din to sa Decision making na gagawin nila.
 Improves business performance – With the help of Portfolio management Mas
maiimprove ng mga business yung mga dapat nilang I improve na hinahanap ng kanilang
mga customers or client’s.
 Equitable use of resources – Fair yung paggamit and kuha ng resources dahil nga may
guide ka.
 Align objectives with goals- Mas Nalalaman mo dito at nakikita mo yung objectives na
kailangan mo talaga para mas makuha mo yung goals na gusto mo.
 Monitors all business processes – Ma observe mo yung takbo ng Business. Dahil nga
may guide ka.