Monday, 20 February 2012

Reducing Portfolio Risk

The challenge of successfully managing an investment portfolio goes beyond making a series of good individual investment decisions. 

Portfolio management requires 
  • paying attention to the portfolio as a whole, 
  • taking into account diversification, 
  • possible hedging strategies, and 
  • the management of portfolio cash flow. 

In effect, while individual investment decisions should take risk into account, portfolio management is a further means of risk reduction for investors.

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