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Construct An Accurate Portfolio Prior To Trading In Stocks And Shares

By:   |   Jul 08, 2018   |   Views: 14   |   Comments: 0

Portfolio management services are now easily available for people who want to invest their money with any financial company or bank. These services are provided by trained account managers who help the investors spread their money over a wide range of financial products to minimize risks and maximize profits.  Share and stock brokers can also provide the investor with services that range from the purchase and sale of shares and stocks to the day-to-day monitoring of investments to find the best price to buy and sell these shares and stocks.

Today, capital markets have grown well beyond their borders with the number of investors and the volume of investments increasing considerably. Steadily increasing prices, with inevitable inflation, put everyone in a position to resort to the aid of investments for a richer return as opposed to the moderate returns received from saving and fixed deposit accounts. Investors need help with their wealth management and so share and stock brokers, both individual and linked to broking companies, and relationship managers from various financial institutions and banks are being employed to guide investors in the right direction.

The full range of investments of an investor is called a portfolio. Services are provided by account or relationship managers or brokers to help the investors put their money in the right investments to suit their long term and short term needs. These services are commonly known as portfolio management investment services.

Portfolio management services involve a number of strategies that have been developed to provide investors with the best investment options. These strategies include equally-weighted portfolios, capital-weighted portfolios, price-weighted portfolios and optimal portfolios to name a few and are structured to give the investor options. This helps investors choose the most suitable one, based on their appetite for risk. The portfolio will usually include a combination of debt and equity and very rarely only debt or only equity investments. A debt fund or investment will be for a fixed period and will earn a fixed rate of interest, irrespective of how well or badly the company is doing. An equity fund or investment will earn a fluctuating dividend depending purely on how the company is performing. Equity investments score over debt investment because of the capacity to earn very large dividends; however, there is also a possibility to earn no dividend at all and hence the additional risk involved. Those with a larger risk appetite will prefer equity strong portfolios, whereas those who have a weak appetite for risk prefer debt strong portfolios.

The first thing investors have to take into consideration when investing their money in stocks and shares is their requirements, both short term and long term. Share and stock brokers can also help investors with their financial needs by deciding what assets to invest in based on what is best suitable for the investor. Once the share and stock brokers have a fair idea of investor's requirements and their investment appetite they will decide what assets to purchase, how much to purchase and the right time to purchase the assets for the investor. These decisions require sufficient research, monitoring of various stocks and shares and the expected returns of these stocks based on current market conditions and the previous performance of the stocks. Share and stock investments are essentially equity investments that give you the opportunity to earn very large returns on your money invested.

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