investment portfolio management
In the previous chapters, you learned about the basic tools for trading on an exchange, got acquainted with the concepts on which is constructed the process of investing in different financial instruments. In addition, you are familiar with the factors, which should be paid attention to when choosing a broker. We now turn to the main part of and consider the investment portfolio management. Here you will find useful technical analysis and fundamental analysis.
The main purpose of the fundamental analysis is the choice of the securities to the formation and investment portfolio management. Using this analysis, you can set the settlement (fair) value of the shares. After the analysis you will be able to compare the collected price to the market price per share and determine underestimated or overestimated this valuable paper. Well, the purpose of the technical analysis of the investment portfolio management is the definition of the moment of the sale or purchase of securities. As you can see, these are two fundamentally different types of analysis, and the only competent combination will allow to develop an effective strategy of formation and investment portfolio management.
Now we will look at the basics of fundamental analysis. So, the purpose of the fundamental analysis - search and analysis of revalued or underserved market companies. His principle in the framework of the investment portfolio management is to detect the indicators for the selected company is undervalued or overvalued, followed by the adoption of the decision on the sale or purchase of its shares. This implies that in the near time the market value of the shares close or equal to the fair price.
The subject area of fundamental analysis in the management of the investment portfolio is very wide. But the typical trader can easily arm yourself with some of the basic techniques. For example, the use of the accounting information, which provide different analytical Agency. As a rule, private investor is not engaged in a detailed track of the state of Affairs in the industry or in the company and does not produce independent calculations. Often the application of fundamental analysis in the management of investment portfolio in the hands of the private investor can be reduced to the use of readily available data and calculations and their comparison.
How is the fundamental analysis in investment portfolio management in practice? Let us pay your attention that in the framework of this training we give only the General model. Many different points, which are not material, will be omitted. But, we are acquainted even from this brief description of the fundamental analysis in the management of the investment portfolio, you will be able to more consciously pick up the securities. You will be able to rely not on advertising or tips, and information about the company, which can be removed, having familiarized with the results of relevant research.
