Portfolio Management is the process of selecting, prioritizing, and managing a collection of investments or assets to achieve specific financial goals. It involves the strategic allocation of resources across various asset classes, such as stocks, bonds, real estate, or other investments, to balance risk and return. The primary objectives of portfolio management are to maximize returns on investments, mitigate risks, and align the portfolio with the investor’s financial objectives and risk tolerance. This process includes ongoing monitoring and adjustment of the portfolio in response to market conditions and changes in the investor’s goals or circumstances. Effective portfolio management can be approached through different strategies, including active management, where managers make frequent buying and selling decisions, or passive management, which involves holding investments for the long term with minimal trading. Overall, portfolio management is crucial for individuals and institutions to effectively grow and protect their financial assets.
Investment performance is cyclical, with different asset classes shining at different times. The "Magnificent 7" stocks currently dominate the market, but they will not always outperform. Diversification, like investing in…