Mary Justine B.

Gallano
BSA 3

1. What is Investment and Portfolio Management? What are the key elements
of Portfolio Management? Discuss each one.

Investment and Portfolio Management involves analyzing different investment

opportunities, choosing the best investment mix to achieve the goal, reviewing
and evaluating the investment portfolio, and implementing the necessary
changes. Instead of just buying and selling a collection of investment
holdings, portfolio management is a focused, well-organized technique for
managing investments in a coordinated manner.

The first step in creating an investment portfolio is establishing your objectives

and calculating the amount needed to achieve them. Once you are aware of
this, you can begin developing and investment plan that will enable you to
achieve your goal.

a. Asset Allocation - A crucial component of portfolio management is

appropriate asset allocation. It is all about risk management. In
accordance with the investor’s risk tolerance, the asset mix in a portfolio
can help reduce the risk.
b. Diversification - Having a variety or investments that are not correlated
to one another is referred to as diversification. Diversified investments
ensures that the entire portfolio doesn’t suffer a large loss when the stock
market, or a certain sector, moves downward.
c. Rebalancing - The portfolio should periodically be rebalanced to the
target proportion. To achieve this, you can acquire and sell holdings as
necessary. If applicable, new funds that have been added to the portfolio
may also be used.
d. Asset Location - Asset location describes the different asset types that
are held in various accounts. The concept of asset location should be
integrated with an investor’s asset allocation as part of the portfolio
management process.

2. What concepts and topics in Investments and Portfolio management are

you most interested in? Why?

Designing optimal investment portfolios that serve people’s need pique my

interest. I'm interested in learning how to use the most recent research data to
efficiently assess investment management solutions. With the global
pandemic, I want to learn about behavioral finance, how investors and the
public reacted to unusual occurrences.