Portfolio Management

Portfolio management is the process of building, monitoring, and adjusting a collection of investments — stocks, bonds, mutual funds, real estate, and other assets — to achieve specific financial goals while managing risk.

There are two main approaches: active management (where a fund manager picks stocks and tries to beat the market) and passive management (where you simply track an index like the S&P 500). Studies show that over 90% of active managers fail to beat the market over 15 years.

Banks offer portfolio management through their wealth management divisions. Fees range from 0.25% to 2% of assets under management annually. The key principles: diversification (do not put all eggs in one basket), asset allocation (the right mix of stocks and bonds for your age), and regular rebalancing.