Anonymous
Dec 8, 2023
Explain the following objectives of portfolio management 1. Liquidity 2. Safety 3. Income ?
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Dec 8, 2023
1. Liquidity: The objective of liquidity in portfolio management is to ensure that there is enough cash or liquid assets available to meet any short-term financial obligations or unexpected expenses. This objective focuses on maintaining a certain level of liquidity in the portfolio to provide flexibility and the ability to quickly access funds when needed.
2. Safety: The objective of safety in portfolio management is to protect the capital invested and minimize the risk of loss. This objective emphasizes the preservation of capital and focuses on investing in low-risk assets or diversifying the portfolio to reduce the impact of any potential losses. The safety objective is particularly important for conservative investors who prioritize capital protection over higher returns.
3. Income: The objective of income in portfolio management is to generate a regular stream of income from the investments in the portfolio. This objective is often important for investors who rely on their investment income to meet their financial needs or for those who seek to supplement their regular income. The income objective can be achieved through investments in dividend-paying stocks, bonds, or other income-generating assets.
2. Safety: The objective of safety in portfolio management is to protect the capital invested and minimize the risk of loss. This objective emphasizes the preservation of capital and focuses on investing in low-risk assets or diversifying the portfolio to reduce the impact of any potential losses. The safety objective is particularly important for conservative investors who prioritize capital protection over higher returns.
3. Income: The objective of income in portfolio management is to generate a regular stream of income from the investments in the portfolio. This objective is often important for investors who rely on their investment income to meet their financial needs or for those who seek to supplement their regular income. The income objective can be achieved through investments in dividend-paying stocks, bonds, or other income-generating assets.
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