INTRODUCTION Portfolio management means selection of securities and constant shifting of the portfolio in the light of varying attractiveness

of the constituents of the portfolio. It is the basis of all scientific portfolio management. The expected return on portfolio is directly related to the expected returns on component securities, it is not possible to deduce a portfolio riskness simply by knowing the riskness of individual securities. Portfolio management includes portfolio planning, selection and construction, review and evaluation of securities. The skill in portfolio management lies in achieving a sound balance between the objectives of safety, liquidity and profitability. Investors should sell at market tops and buy at market bottoms. Timing is a crucial factor while switching between shares and bonds.

Meaning Portfolio management means combination of assets. The main intention of portfolio management is diversifying risk, that means if you have lumpsum amount that amount you invest in different type of companies shares so here you diversifying risk that means if you receive loss in one company of shares at the same if you receive profit in one company of shares the loss will covered by this profit this is called portfolio management

Portfolio Management is used to select a portfolio of new product development projects to achieve the following goals: Maximize the profitability or value of the portfolio Provide balance Portfolio Management is the responsibility of the senior management team of an organization or business unit. This team, which might be called the Product Committee, meets regularly to manage the product pipeline and make decisions about the product portfolio. Often, this is the same group that conducts the stage-gate reviews in the organization. A logical starting point is to create a product strategy - markets, customers, products, strategy approach, competitive emphasis etc. The second step is to understand the budget or resources available to balance the portfolio against.Third, each project must be assessed for profitability (rewards), investment requirements (resources), risks, and other appropriate factors.The weighting of the goals in making decisions about products varies from company.

Investment objectives and constraints Investing is a wide spread practice and many have made their fortunes in the process. The starting point in this process is to determine the characteristics of the various investments and then matching them with the individuals need and preference. All personal investing is designed in order to achieve certain objectives. These objectives may be tangible such as buying a car, house etc. And intangible objectives such as social status, security etc. similarly, these objectives may be classified as financial or personal objectives. Financial objectives are safety, profitability and liquidity. Personal and individual objectives may be related to personal characteristics of individuals such as family, commitments, status, dependents, educational requirements, income, consumption and provision for retirements etc

Constraints The last stage determining policies is to establish the constraints on the portfolio. The constraints means factors or limitations which decide the achievements of the objectives. There is a reasonable relationship between objectives and constraints. The following constraints are including a statement of policy: Portfolio risk level. Types of securities selected. Diversification Tax saving Liquidity Strategy

Two types of process in Portfolio Management The process of portfolio management provides a better understanding about the benefits, loss and the risks regarding the business.. The portfolio management is differentiated into two major types. They are the enterprise portfolio management process and the project portfolio management process. The enterprise portfolio management gives information regarding the amount of finance to be spent over the business and the requirement of the enterprise architecture. The project portfolio management gives an analytical approach to the decisions over the sets of portfolio.

Facts about Portfolio There are many investment vehicles in a portfolio. Building a portfolio involves making wide range of decisions regarding buying or selling of stocks, bonds, or other financial instruments. Also, one needs to make decision regarding the quantity and timing of the buy and sell. Portfolio Management is goal-driven and target oriented. There are inherent risks involved in the managing a portfolio.

8 Steps to Portfolio Management Standardize and automate the governance processes. Define multiple workflows to subject each project to the appropriate governance controls throughout its life cycle from proposal to post-implementation resulting in lowered costs, faster cycle times, and increased quality. Capture all investments within a central repository. Consolidate business and information technology (IT) investments within an enterprise repository to improve visibility, insight, and control. Implement repeatable processes as templates to standardize and streamline data collection across the organization. Centralized data facilitates cross project analysis of finances, resources, schedules as well as other data trends and status for informative reports. Objectively prioritize business strategy and competing investments. Employ proven techniques to define and prioritize your organizations business strategy for the upcoming planning period, and automatically derive objective prioritization scores to effectively evaluate the competing investments from multiple dimensions. Align the selected portfolios with the business strategy. Run optimization what-if scenarios to identify tradeoffs and select the optimal portfolio under varying budgetary and business constraints that best align with your organizations business strategy. Take advantage of advanced portfolio analytical techniques to identify and break the constraints prohibiting the portfolio from reaching the Efficient Frontier.

 Effectively manage resources.

Without understanding long-term workloads and capacity, companies can experience inefficient hire-fire cycles, resulting in higher overhead, lost knowledge, and poor employee morale. By providing visibility into overall work commitments, actual timesheets, and resource capabilities, create resource plans to align your strategic recruiting and outsourcing with your long-term business objectives. Collaborate and coordinate easily. Helping to ensure that teams share common goals and work together effectively becomes more vital as organizations become more geographically and culturally diverse. Web-based access to timely, business-critical project information means teams can share knowledge, collaborate smoothly to complete tasks and deliverables, and adjust activities quickly to accommodate Measure and track portfolio performance. Effectively measure and track projects, programs, and applications throughout their life cycle, giving you the visibility to proactively identify potential issues, make decisions, and help ensure that your portfolios maximize return on investment (ROI) and improve operational efficiencies. Quickly realize a return on investment. By enabling increased employee productivity, faster cycle times, reduced costs, and improved time management, portfolio management solutions provide a positive and sustainable return on investment. In IT portfolio management, software can cut costs 2-5 percent, improve productivity 20-25 percent, and shift 10-15 percent of budgets to more strategic projects. In developing and bringing new products to market, the best performers those who have applied rigorous process and technology to their research and development and go-to-market activities can reduce time to market by more than 30 percent.

FEATURES OF PORTFOLIO MANAGEMENT Portfolio management is managing a set of investment assets with the objective of maximizing the overall returns for the given risk. The important point to focus on is overall risk and return. Building a portfolio mix of stocks and bonds is a way to diversify the investment risk that arises as a result of concentrating the investment in one type of assets or few assets.

Portfolio management process Portfolio management is a reasonably simple process. Unfortunately making something simple is not how the world operates. Portfolio management or even investment is made difficult by us because of our greed of earning extra ordinary returns without our homework and missing good investment opportunity because of fear of losing the money. Hence portfolio management is important. Portfolio management fulfils two important requirements of investors: one, the need to preserve money and second, the need to achieve good returns on the investment.

Objectives Short term high priority objectives: Investors have a high priority towards achieving certain objectives in a short time. For eg, a young people will give high priority to buy a house. Thus, investors will go for high priority objectives and invest their money accordingly. long term high priority objectives: Some investors look forward and invest on the basis of objectives of long term needs. They want to achieve financial independence in long period. For eg, investing for post retirement period or education of a child etc. investors, usually prefer a diversified approach while selecting different types of investments.

low priority objectives: These objectives have low priority in investing. These objectives are not painful. After investing in high priority assets, investors can invest in these low priority assets. For eg, provision for tour, domestic appliances etc. Money making objectives: Investors put their surplus money in this kind of investment. Their objective is to maximise wealth. Usually, the investors invest in shares of companies which provides capital appreciation apart from regular income from dividend.

The basics and ideas of Investment Portfolio Management are also applied to portfolio management in other industry sectors . Application Portfolio Management: It involves management of complete group or subset of software applications in a portfolio. These applications are considered as investments as they involve development (or acquisition) costs and maintenance costs. The decisions regarding making investments in modifying the existing application or purchasing new software applications make up an important part of application portfolio management. Product Portfolio Management: The product portfolio management involves grouping of major products that are developed and sold by businesses into (logical) portfolios. These products are organized according to major line-ofbusiness or business segment. The management team actively manages the product portfolios by taking decisions regarding the development of new products, modifying existing products or discontinue any other products. The addition of new products helps in diversifying the investments and investment risks. Project Portfolio Management: It is also referred as an initiative portfolio management where initiative portfolio involves a defined beginning and end; precise and limited collection of desired results or work products; and management team for executing the initiative and utilising the resources. A number of initiatives that supports a product, product line or business segment, are grouped into a portfolio by managers.