The broad topic of portfolio management covers all the decisions you have to make about your investment portfolio.

 

Learn & Connect Investor Resources Is investing risky? Managing my portfolio

Portfolio management key elements include asset allocation and diversification as well as some of the more practical aspects of managing a portfolio such as having an investment plan, implementing investment strategies, position sizing, rebalancing your portfolio and keeping track of performance.

Position sizing matters
  • Position sizing refers to how much of a stock you buy when you build your investment portfolio. This article from trader Nick Radge is equally relevant to investors as well as traders and explains 2 basic methods of position sizing.

Rebalancing your portfolio

  • Over time the asset classes in your portfolio will change as the market changes. Rebalancing your portfolio aims to periodically adjust your investments so they match your asset allocation plan again.

Importance of dividends on performance

  • An interesting study of performance demonstrating the importance of including dividends when calculating returns on investment. The article uses LICs to illustrate the point, however, the measures could be applied to any investments in your portfolio and to your portfolio in its entirety.

Tracking performance of your investments

  • One of the most important things you can do when tracking the performance of your investments is to set the right expectations. A percentage return that could be considered good in one market might be considered poor in another. This article is US-based but the approaches can be applied to Australian indices.

Using benchmarking in investing

  • A benchmark is a standard or measure that can be used to compare the return of a portfolio.  The key to benchmarking is to choose one that is relevant to your portfolio.

2 ways to measure investment performance

  • A comprehensive comparison including calculations and examples of 2 performance measures – time weighted rate of return and dollar weighted rate of return.