Portfolio management involves 6 steps in an ongoing process.

1. Determine Objectives/Constraints
2. Formulate a Strategy
3. Design an Investment Policy
4. Implement Asset Allocation
5. Monitor Performance
6. Evaluate Performance

As an ongoing process, it is the responsibility of the portfolio manager (whether that’s you or a professional) to go through the process (beginning at “Determine Objectives and Constraints”) and upon reaching the “Evaluate Performance” stage, start again.

Why is it an ongoing process? Because life is not static. People move, they change jobs, they get married, they get divorced, they get remarried, they have children, they make large purchases, they make wise decisions, they make unwise decisions, they are faced with windfalls and tragedies. Each of those (and many, many other) events will affect how they manage their portfolio.

Every individual has different needs and wants. The first step to successfully manage your investment needs is to identify them by drafting an investment plan. This plan should state your goals. It is simply a mission statement of what you endeavor to achieve. Be as specific as you can, so that you can determine what to invest in, and how your portfolio will be structured to realise your dream.

We will review the 6 steps in our upcoming series of articles and I really hope you will benefit from it.

Mr Stanley Chua has been serving for the past 10 years as a successful international consultant and project management expert. Harvestime Resource LLP (http://www.wowdomains.net) is a Singapore-based resource firm specializing in the marketing and distribution of high quality information in wealth creation, financial investment and planning, Internet technology and personal well-being.

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