A Portfolio Management Approach To Life

Hello World,

Are you an investor? I am! But there is always a hesitation that has to tag along with investing, correct?! Yes, you are not alone, I know many people who choose not to invest because they are afraid to take that risk. Risk of losing it all! A lot of you would rather live a monotonous life due to the uncertainty of the outcome. However, the ones that take calculative risk are a bit ahead of you today. They are a ahead of you a bit more by wealth, knowledge, awareness, and or confidence.

Asset Class…

Asset classes are securities that make up your portfolio such as equities, stock, bonds, fixed incomes, cash equivalents or money market instruments. Life has it’s own asset classes, Health, Knowledge and Wealth. These are the life long securities that you need to progress and invest in.

Portfolio Management assess the Investment Objective of your situation in order to find the correct securities to build your portfolio. Investment Objectives that come into play for instance; Current liquidity and Net worth, Time Horizons, Income Level, Expense Level, Charitable contributions, Restrictions/Security Selection. Similarly in life you have to assess your objectives to advance in your goals. Intermarkent Analysis, is used to analyze the stocks, bonds, and commodities. Likewise we need is to review the strength and weaknesses of our life securities. Are you Healthy? Are you advancing in your career? No and No? Then why not? Those are the questions we need to ask.

Asset Allocation…  

No one wants to lose! That’s why in Modern Portfolio Theory we need Diversification in our portfolio. That way we have mix assets which balances any loss from one or more securities in our portfolio. To learn more about your personalities and traits you need diversification in your life. if you don’t try new things and explore in life then your perspective, outlook, and options are limited.

There are many methods of Portfolio management, one of which is Rebalancing, this method allows your portfolio to return to it’s original target allocation at annual intervals. This means you sell high priced, low value securities and buy low priced, high value securities. Scenario Analysis helps to work out if the security will be affected by unexpected circumstances. These are all ways of Risk Aversion, low risk portfolio. That’s all you need in life, calculated risks, which will push you a little towards learning and progress. For example, you would like to become a CIO Consultant at a reputed IT Consulting Firm. The only thing in your way is a Professional Designation. It’s a risk to earn the Designation because it will be time consuming studying for and what if you don’t get your desired position. Take that Risk! Not only does the Designation gives you an competitive edge over others and open up more opportunities but also teaches you something new.


A conservative portfolio looks like, 20% funds, 20% Stocks, 50% fixed income and 30% short term money market. There is also Aggressive management, where the portfolio looks something like equities 85%, fixed income/cash 15%. In the Aggressive approach, the return is high but also the risk is more. Aggressive risk is for people with high liquid and net worth or who has more years in their Time Horizon. In Portfolio Management you can choose a Discretionary Investment Management, this is when a Portfolio Manager takes over and makes the decisions for you. You don’t quite have that option in life. If you are not a high risk taker then start by taking smaller risks towards your life goals. Build your confidence. Invest in becoming healthier. Invest in education. Try new things. All this in return will build your wealth.





One Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s