Portfolio Techniques Definition

Portfolio techniques are methods used by investors to choose a mix of investments that aim to maximize returns while minimizing risk. Many different portfolio techniques exist, but they all share the same goal of creating a well-diversified portfolio that meets the investor’s specific goals and objectives.

One popular portfolio technique is asset allocation, which involves dividing investment funds among different asset classes such as stocks, bonds, and cash. The goal of asset allocation is to create a diversified portfolio that can weather different market conditions. Another common portfolio technique is rebalancing, which involves periodically selling assets that have increased in value and buying assets that have declined in value, in order to maintain the desired mix of investments.

Portfolio techniques are not static; they should be regularly reviewed and updated as needed in order to keep up with changes in the markets and the investor’s goals and objectives.