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Question: Discuss about the Portfolio Management. Answer: Portfolio Management can be referred as an art and science of making a decision regarding investment mix and policy harmonizing with the objectives relating to asset allocation for individuals and organizations. The main investment goal of my investment portfolio was to organize a diversified portfolio with an intention to earn appropriate returns on the shares with minimum risk (Martinsuo, 2013). The strategy which has been followed while preparing portfolio evolves not to put all the money in risky shares but to divide the available funds into two parts i.e. the first portion was allocated to the securities from where the return will be received at a small rate, but it was sure that capital return would be received. A major part of the whole investment was done in securities having high and secured returns. The remaining portion was allocable to risky securities having fluctuating marketing value but having the possibility of profit at a higher rate. The portfolio was organized in a way that the overall the losses does not supersede the gains which have been earned and the same have been done by following the strategy of diversification. The information sources which have been taken for the purpose of making transactions involves annual report, history of share prices of the company, tracing the trend being followed by the prices of the company and the data available through news relating to the companies in which investment has been made. In accordance with the study of Beringer, Jonas Kock, (2013), ratios such as operating profit margin, debt equity ratio and dividend per share which were available on finance websites were also assessed in an appropriate manner before making transactions. As per the views of Martinsuo, (2013) lower price of shares has to be reviewed with a new approach and with same focus should be made to the capital development and productivity in the industry. As oil prices have been reduced by approximately sixty percent since summer 2014, but it is expected that the prices will increase. In this situation, it is better to keep stock rather than selling off the same at lower prices. As the prob ability of higher capital profit in future is more; thus the same should be retained. One of the stock i.e. BHP BLT FPO has been sold @ $26 as the share price of same were bullish, and a probability exists that in future prices can be decreased ; thus it is an appropriate time period to sell off the shares. Shares of Wesfarmers Ltd have been bought @ $39 as they had bearish share price and probability exist that maximum capital profits can be gained through them in future. Shares of CWLTH Bank @$90 as the same have reached to a higher value in comparison to the value at which it was purchased; thus they have been sold to attaining maximum profits. NAT GAS which is being traded is SP 500, the share price of same have been decreasing @.29 % in comparison to the last price; thus shares of this company will be purchased as the company has development projects for the future. Shares of Woolworths and MACQ group have also been sold @ $29, and $90 as prices of both the shares were having bullish characteristics; thus the transaction was made after analysing past trends and p resent share price position. The same will be done with the intention of earning more profits by an increase in capital. Share Price of SPDR Gold Trust has been increased @.90 % in comparison to the previous price, but after assessing the trend of past five years, it can be said that the same has decreased by 0.29% in overall. Thus the same will be sold off as it is an appropriate time to sell off the shares so that maximum returns can be earned (SPDR Gold Trust (GLD), Share Performace, 2017). As crude oil is a lucrative investment, thus the same should be kept for future selling because prices have not increased to the expected level. By considering this factor, high volume of trading is done in this security on a daily basis. Thus the other benefit of liquidity is always available with the stock. Figure 1: % Change in price of share of Crude (Source:Crude Oil.Share Performace,2017 ) Earning yield of Dow Jones has been decreased by 1% i.e. it was 6% in the year2015, but for the year2016, it was 5.1%. Thus the stock needs to be assessed for some more time, and then the decision regarding selling and purchasing of shares relating to same should be taken. Figure 2: Comparison of earning yield of Dows and Jones with US GDP (Source: Historical Chart. Dow Jones) It can be accessed from above chart that the annual earnings have been in accordance with the trend which has been followed by U.S. GDP. However, a small volatility has been observed that the percentage available is higher in comparison to the percentage of GDP in recent decades. But as a few negative earnings are present in past few years, the stock needs to be assessed so that more appropriate decision could be taken regarding the shares of Dow and Jones.In accordance with views of Bakker, D. (2014), it is not possible to ascertain what will be the future value of a particular stock but it can be ascertained that whether the share price is presently significantly undervalued or overvalued. This information works as an essential tool for taking a decision relating to purchase and sales of shares. While conducting the transactions and managing the portfolio, I learned the importance of the concept of diversification in portfolio management. It is better to invest in the security of different risk so that overall risk is appropriately managed. Whole investment should not be made higher risk securities because if things do not go according to expectation than there is a risk of higher loss. Thus it is better to invest in securities of different sectors so that fruitful returns can be earned. I learned the manner of assessing key ratio and changes in share price in an appropriate manner. Key ratio and change in share price play an important role in taking a decision relating to sale and purchase of shares (Hollensen, (2015). The ability relating to attaining investment objectives and identifying constraints relating to planning while managing portfolio became more efficient while managing the portfolio. Even I improved the efficiency of measuring and evaluating portfolio performance and rebalancing the portfolio as per the requirement. Now, I am able to implement the strategy relating to purchasing and selling shares in the more appropriate manner in comparison to the manner I do the same in the past. I got introduced to the options and futures during the course. I am able to analyse the performance over the period of time and make the appropriate required adjustment necessary for asset allocation and security selection References Books and Journal Bakker, D. 2014.Vertical Brand Portfolio Management: Strategies for Integrated Brand Management Between Manufacturers and Retailers. Springer. Beringer, C., Jonas, D., Kock, A. 2013. Behavior of internal stakeholders in project portfolio management and its impact on success.International Journal of Project Management,31(6), 830-846. Hollensen, S. 2015.Marketing management: A relationship approach. Pearson Education. Martinsuo, M. 2013. Project portfolio management in practice and in context.International Journal of Project Management,31(6), 794-803. Online SPDR Gold Trust (GLD).Share Performace. 2017.[Online]. Available through https://www.stocktrak.com/quotes/quotes?converted=1sym=GLD. [Accessed on 31st July 2017] Crude Oil. Share Perfomance. 2017.[Online]. Available through https://www.stocktrak.com/quotes/quotes?converted=1sys. Crude Oil/ . [Accessed on 31st July 2017] Historical Chart. Dow Jones.2017.[Online]. Available through https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart/ . [Accessed on 31st July 2017