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Portfolio management

What is a portfolio?

Portfolios are combinations of securities or shares used to manage risk and diversify investment. Even if one stock goes down, the others might be steady or going up.

We need to specify:

1. The minimum income you need from your portfolio
2. The maximum principal amount that you can invest
3. The goals of income and principal including increases
4. The time horizon of investment
5. The ability to convert stock to money or liquidity
6. Tax considerations

Managed Portfolios

These are managed by experts or investment companies classified as:
1. Closed-End Companies
The base investment of this portfolio is closed i.e. does not change.
2. Dual Funds
Income shares and Capital shares are the two kinds of stock in dual funds. This fund is Closed-End. The investor specifies if he would like income shares, and get all the interest and the dividend. If capital shares are selected, the investor gets capital gains of the share price increase.
3. Open-End Companies or Mutual Funds
These companies buy and sell shares as required. These include growth funds, balanced income and industry funds.
4. Money Market Funds
These are short term issue of securities by the government.
5. Municipal Bond Funds
These are investments in tax-exempt bonds
6. Index Funds
These represent the composition of the market.

Along with experts, help is also provided by the trustee bank. Thus we see that managed portfolios could give you a far better deal, than you facing the storm of the market alone.

Investment

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