Invest Forma
Investments, investment management, investment project

ru / eng
«    Август 2021    »

The classification of investment portfolios
Section:   eng » Investment portfolio and its methods of management  
The classification of investment portfolios  Investment portfolios are of different kinds. The criterion for their classification can serve as a source of income from the securities forming the portfolio, and risk.


Typically, securities generate income in two ways:

• due to the growth of their market value;

• due to additional income (in the form of dividends on shares or coupon bonds).


If the main source of income on securities portfolio is the growth of their market value, these portfolios are usually referred to portfolio growth. These portfolios can be divided into the following types:


simple growth portfolios are formed from the securities market value of which is increasing. The purpose of this type of portfolio growth - the value of the portfolio;


portfolio of high growth targets for the maximum capital gains tax. The portfolio consists of securities of growth companies. Investments are quite risky, but at the same time can yield very high returns;


portfolio of moderate growth is the least risky. It consists primarily of securities of well-known companies, which are characterized, although low, but steady pace of growth in market value. The portfolio has remained stable over a long period of time and aims to preserve capital;


portfolio of medium height - a combination of investment property portfolios of moderate and high growth. This ensures the average capital gains and moderate risk. Is the most common model portfolio.


If the source of income on securities portfolio are additional amounts of money, such portfolios are usually referred to the portfolio income.

Portfolio income is focused on obtaining high current income - interest on bonds and dividends on the shares. It should include stocks, characterized by moderate growth in market value and high dividends, and bonds and other securities that provide higher current payouts. The purpose of creating this portfolio - to a certain income level, the magnitude of which would be consistent with minimum risk. Therefore, the objects of portfolio investment in this case are highly reliable financial assets.


These portfolios can also be subdivided into:


fixed income portfolio - a portfolio that consists of highly Securities and brings the average income with minimal risk level;


High-income portfolio includes high-yielding securities that will provide high returns with an average level of risk.


In practice, investors prefer both methods of generating income securities portfolio, which makes investing in so-called combined portfolios. They are formed in order to avoid possible losses in the stock market, as from a fall in market value and low dividend and interest payments. One part of the financial assets of the owner brings an increase in its capital due to growth in market value, and another - by receiving dividends and interest. The fall of the capital gains due to a decrease of one part can be compensated by an increase in another.


If we consider the types of investment portfolios, depending on the degree of acceptable risk for the investor, it is necessary to consider the type of investor.


During the formation of investment policy specified value have individual inclinations of human risk. Some people prefer to act with caution, making no claim to a large income. Others may go on a very big risk for the sake of getting a high income.


Investors are divided into conservative, moderately aggressive and aggressive.


Conservative type of investor is characterized by a tendency to minimize the risk to reliability investments.


Moderately aggressive investor type are inherent traits such as risk tolerance, but not very high, the preference of high yield investments, but with a certain level of security.


An aggressive investor is willing to take risks for the sake of obtaining a high yield.


In order to bring the necessary investment portfolio returns, they must manage. Under the management of investment portfolios mean a combination of methods, which provide:

• preserving the original investment;

• achieving the highest possible level of profitability;

• reducing the level of risk.


Usually singled out two ways to control: active and passive



Active management - it is governance that is associated with a permanent tracking of the securities market, the acquisition of the most efficient securities and a quick relief from low-income securities. This kind of suggests a fairly rapid change in the composition of the portfolio. In this widely used monitoring, which helps to quickly respond to short-term changes in the securities market and to identify attractive securities for investment.


Monitoring of active management involves:

• selection of securities (purchase and sale of high-yielding low-income securities);

• identification of risk and return portfolio with a new account

rotation of the securities;

• to compare the effectiveness of old and new portfolios, taking into account the cost of operations on purchase and sale of securities;

• Restructuring of the portfolio, updating its membership.


Active monitoring - is a continuous process of monitoring the stock prices, a situation analysis and forecasting of future bids.

Active management is typical for sophisticated investors, investment managers, highly skilled, it requires a good knowledge of the securities market, the ability to quickly navigate changing market conditions.


Passive management - it is portfolio management, which leads to the formation of a diversified portfolio and keeping it for a long time.


Monitoring of passive management involves:

• determine the minimum level of profitability;

• selection of securities in a well-diversified portfolio;

• Forming the optimal portfolio;

• Update portfolio when falling below the minimum yield.


Monitoring is the basis for an adequate income from investments, depending on the intensification of transactions with securities.

Other Related News:

  • Formation of an investment portfolio
  • Investment management of financial assets
  • The nature and function of investment management
  • Forms of Foreign Investment
  • Investment risk

  • Информация
    Посетители, находящиеся в группе Гости, не могут оставлять комментарии в данной новости.
    Successful Investors

    Home    Register    Contacts    Sources   

    Investments, investment management, investment project
       Copyright 2010 ©