What are we chasing? Yield or safety or Yield with Safety?

Generally, portfolio management is a combination of finding the right balance between attaining the possible yield adjusted to the risk appetite of the client. Chasing only yield and returns can cause the portfolio to be highly imbalanced in terms of taking a risk over and above client appetite. On the other hand, only looking for safety will make the portfolio extremely conservative and will leave no room for active management.

Tactical allocation is an important aspect of active portfolio management, wherein some short term calls can be taken in order to enhance the yield and take advantage of market opportunities, but on a broader scale as portfolio managers, striking the right balance between risk and returns is the ultimate long term objective, in order to attain long term performance for the capital invested. Smart and prudent allocation is also the test of the intellect. While grabbing opportunities that seem viable towards tactical allocation, prudence and experience plays a vital role in the identification of the prospect.

#riskmanagement #riskmanagers #opportunities #market #leadership #leadershipskills #XanaraSays