The Portfolio Management Process

Question 1

The portfolio management process

Answer 1

1. Determine investment objectives and constraints.
2. Create an investment policy statement.
3. Establish an asset allocation strategy.
4. Select securities.
5. Monitor the client and the markets.
6. Evaluate the portfolio’s performance.
7. Rebalance.

Question 2

stepping asset allocation (seed formation stage)

Answer 2

start below SAA and gradually work your way up to adjust to it emotionally. happens in seed formation stage (age 20-40)

Question 3

mid life savings amount

Answer 3

should have 20x annual retirement income need (age 35-60)

Question 4

pre retirement

Answer 4

preserve funds, 50% equity or optimum asset mix during previous stage, whichever is lower

Question 5

Objectives and constraints

Answer 5

risk objective, return objective

time horizon, liquidity, tax, legal and regulatory, and unique circumstances