A portfolio is an accumulation of various stocks from different sectors. A wise investor will always choose to invest their money in various stocks to balance out the risk and earn sufficient return. A portfolio helps the investor to earn profits during those times when one/few sectors are working weak. A portfolio will nullify the negative effect by earning positively from the other sectors. A PMS is a tool that a financial brokerage firm provides to its clients for a safe investment purpose. PMS helps the clients to build a strong portfolio by selecting stocks from different industries, earn returns with minimum risks, and evaluate the shares when the market shows fluctuations.

No investor should invest all of their money in a single segment. The investor should possess a diversified portfolio so that even if one sector is not performing well, the other sectors can save the investment. To create a balanced portfolio, an investor needs to select few sectors which can balance out each other. The next step is to study the industries, i.e., to evaluate the performances of various companies included in each industry. The last step is to select the best stocks from each industry and allocate the appropriate amount of funds in stock. In this manner, an investor can create a balanced portfolio.

While creating a portfolio, an investor should consider various factors, such as the growth of the industry, the opportunities available in the industry, the company’s financial position, cash flow, liquidity, earning capacity, market share, plans, financial ratios, government’s attitude towards the industry and the company, historical trends of returns, etc.

Managing a portfolio can guarantee returns and minimize risks. The decisions regarding buying, holding, or selling can only be made if the portfolio is managed well. For a professional perspective and guidance, investors must take advice from their brokers as they have knowledge and expertise for the same.

A portfolio minimizes the risks involved in investing in equity. The main purpose of creating a portfolio is to not allocate all the funds in one single stock. If the volatility is high, the investor can incur huge losses. A portfolio helps the investor to earn returns through different sectors and increases the safety of the investment.

Multiple factors can affect the market conditions which can result in the downfall of investment value or increase it. These factors are uncertain and cannot be predicted up to a certain extent. After creating a balanced portfolio, the main task of an investor is to keep revising the portfolio so that if any changes are required, the investor can withdraw the money and invest in another company.