Portfolio Management

What goes into portfolio management?

Portfolio management is the selection and overseeing of investments designed to help you reach your goals now, and later on. Our financial advisors will work with you to select investments such as stocks, bonds, and other assets to align with your investment strategies. As an advisory client, you'll get ongoing account oversight, while as a brokerage client you'll be responsible for the ongoing management of your investments.

What does a portfolio manager do?

A portfolio manager is a skilled professional or team of professionals that oversees and manages your investment portfolio with the aim of maximizing returns while considering your risk tolerance and goals. Their primary role is to conduct research, analyze market trends, and select the best securities or assets like stocks, bonds, or commodities to include in your portfolio. A portfolio manager will also monitor the performance of investments and make buy or sell decisions as needed to optimize returns and manage risk. Additionally, they'll provide regular updates, performance reports, and ongoing guidance to help make sure you reach your investment goals.

Get matched with a financial advisor that can help you choose the best options for you.

What is active vs. passive portfolio management?

Active and passive portfolio management are two distinct approaches.

Active portfolio management is a hands-on approach. Portfolio managers use extensive research, analysis, and market forecasting to identify undervalued securities or sectors. Their aim is to generate higher returns by actively buying and selling investments based on their insights and market trends.

Passive portfolio management, however, takes a more hands-off approach. The goal is to replicate the performance of a benchmark index like the S&P 500 rather than outperform it. Passive managers typically invest in a diversified portfolio of securities that mirror the index's composition.

Ultimately, the choice between the two depends on your preferences, risk tolerance, and goals.

Ready to find the right investment strategy for your portfolio? Talk to a financial advisor today.

How can portfolio management diversify my portfolio?

By selecting a mix of different asset classes like stocks, bonds, commodities, or real estate, a portfolio manager can help build a well-rounded and diversified portfolio.

A portfolio manager might use in-depth research to identify investments with a low correlation to each other—meaning that when one investment performs poorly, others may perform well, helping to mitigate losses. They could also consider factors like geographical location, industry sectors, and market capitalization. Additionally, a portfolio manager might use different investment styles like value, growth, or income investing, to further diversify the holdings in a portfolio.

Want to know more? Take a look at our guide on diversification.

How does asset allocation work in portfolio management?

Asset allocation is a crucial strategy used by portfolio managers to determine how investments are distributed across different asset classes within a portfolio. For example, during periods of market volatility, bonds may provide stability while stocks offer growth potential.

Asset allocation helps spread risk across different types of assets like stocks, bonds, cash, and alternatives, based on your risk tolerance, financial goals, and time horizon. And as market conditions change up or down, your portfolio manager will review and rebalance the asset allocation as needed to help maximize returns while managing risk.

Learn more about how asset allocation can be part of your portfolio. Get our guide.

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