What are the three tools in portfolio management? (2024)

FAQs

What are the three tools in portfolio management? ›

Some individuals do their own investment portfolio management. That requires a basic understanding of the key elements of portfolio building and maintenance that make for success, including asset allocation, diversification, and rebalancing.

These tools provide a centralized platform to track the progress, resources, and performance of multiple projects simultaneously. By consolidating project data in one place, they enable managers to view the big picture and make informed decisions about project prioritization, investment, and resource allocation.

The three-fund portfolio consists of a total stock market index fund, a total international stock index fund, and a total bond market fund. Asset allocation between those three funds is up to the investor based on their age and risk tolerance.

The Project Management Institute (PMI) defines three phases to the portfolio lifecycle or process: plan, authorize, and monitor and control.

The Project Portfolio Evaluation Tripod: Value, Balance, Strategy. These are the three dimensions you'll need to consider in order to assess or reassess the performance and quality of a portfolio of projects.

Portfolio-based assessment offers a viable alternative to traditional, standardized, high stakes testing. It provides a means for those students at risk for academic failure to demonstrate progress within a format less restrictive and inflexible than the traditional means.

Example of Portfolio Management

With a Rs 10,000 investment corpus, a portfolio manager strategically allocates it to various units, such as real estate, mutual funds, and shares. This allocation aligns with the individual's financial goals and risk tolerance, aiming to maximize profitability.

These are People, Philosophy, Process, and Performance. When evaluating a wealth manager, these are the key areas to think about. The 4P's can be dissected further, but for the purpose of this introduction, we'll focus on these high-level categories.

Portfolios can contain a range of items–plans, reports, essays, resume, checklists, self-assessments, references from employers or supervisors, audio and video clips.

What are the tools of portfolio analysis? ›

The tools used in portfolio analysis include holding period return, arithmetic mean, Sharpe ratio, Alpha, tracking error, information ratio, and Sortino ratio. Regularly analyzing the portfolio is crucial for effective investment management.