Guarding Your Wealth Through Portfolio Management

Having a sound portfolio management system is essential to guard your wealth. You might pass up many investment opportunities if you still need to set up one. A sound portfolio management system will assist you in diversifying your investments, ensuring that you are not overly exposed to any one type of asset, and determining when you should rebalance your portfolio.


A well-constructed portfolio is an essential component of investment management. However, if you need clarification on whether you have a well-balanced portfolio, you should talk to a financial professional like Larry Creel. They can assist you in understanding your asset allocation and what steps you should take to improve your portfolio.

Rebalancing your portfolio is necessary to help you reach your financial goals. The method may include adding or removing assets from your portfolio. This may occur if you have a large influx of cash, are dissatisfied with your portfolio risk, or are interested in new investments. It is also the right time to reconsider your financial objectives.

Investing in a diversified portfolio can help you reduce your investment risk. For example, a portfolio of just stocks may result in an excessive loss during market corrections. In addition, a portfolio comprised of all bonds is not designed to outperform equities regularly.

Non-Discretionary Portfolio Management Service

Unlike discretionary portfolio management services, non-discretionary portfolio management services are based on client instructions. Certain companies provide these services. Non-discretionary portfolio management service is designed to help a client tailor a portfolio to meet his financial goals. It also helps in transferring funds from one account to another.

The non-discretionary portfolio management service allows clients to transfer securities and invest up to 25% of the assets under management (AUM) in unlisted securities. These securities are not traded on any recognized stock exchange in India. The unregistered securities for investment by portfolio managers include Real Estate Investment Trusts, Infrastructure Investment Trusts, debt securities, and units of Alternative Investment Funds.

Non-discretionary portfolio management service allows an investor to choose the stocks or sectors he wants to invest in. The service also provides the client with recommendations on investment funds. In addition, depending on the client’s risk tolerance, the portfolio manager may recommend stocks or financial derivatives.

Active Management vs. Passive Management

Investing in the stock market is an activity that requires constant learning and curiosity. However, it also requires a strategy to navigate the markets successfully. A portfolio management strategy can help you to achieve this.

Active management portfolios are designed to outperform specific benchmarks. Typically, they are constructed as unit investment trusts or exchange-traded funds. Conversely, passive management portfolios are designed to replicate the performance of a particular index.

Active management portfolios have higher fees compared to passive funds. They can also provide a higher risk. In addition, they often have higher turnover rates. This may result in less tax efficiency. However, they are also likely to produce capital gains.

Passive investment strategies are generally geared to mimic market-cap-weighted indexes. They also tend to produce minimal capital gains. However, they are easy to monitor and track.

The Efficient Market Hypothesis (EMH) states that security prices reflect fair value. However, the EMH does not apply to all asset classes. The less efficient categories tend to be niches or non-U.S. companies. In irrational markets, security prices move independently of fundamentals. This type of volatility can lead active investors to focus on stock valuations.


Investing in various asset classes increases the chance of a good return. While diversification is not a guarantee of a profit, it reduces overall risk. In addition, diversification can reduce portfolio maintenance time.

A diversified portfolio can include assets that perform well in different economic conditions. This can be particularly useful if you are investing in stocks.

Investing in different industries can also help reduce portfolio risk. This can include a diverse mix of stocks, bonds, real estate, and other assets. For example, if an investor’s portfolio is mainly allocated to real estate, he may choose to invest in 25% retail and 25% residential, office, and industrial stocks.

Diversification is often compared to running a fruit stand. While it may appear counterintuitive, it is the most effective way to prevent a single investment from causing the entire portfolio to crash.

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