Finance
1. What major requirements do client expect from their portfolio managers?
We have two major requirements of a Portfolio Manager:
1. The ability to derive above average returns for a given risk class (large risk-adjusted returns); and
2. The ability to completely diversify the portfolio to eliminate all unsystematic risk.
The client expect from their portfolio managers are to help them manage their money in less time. Most of the client requires a portfolio manager who can preserve their money on time, who can plan in saving of his client according to their need and preferences, who can discuss any concerns regarding money or saving, the client can interact with his appointed portfolio manager on monthly basis.
In summary, constructing a policy statement is mainly the investor’s responsibility. It is a process whereby investors articulate their realistic needs and goals and become familiar with financial markets and investing risks. Without this information, investors cannot adequately communicate their needs to the portfolio manager. Without this input from investors, the portfolio manager cannot construct a portfolio that will satisfy clients’ needs; the result of bypassing this step will most likely be future aggravation, dissatisfaction, and disappointment.
2. What can a portfolio manager do to attain superior performance?
With this in mind, we say a function is an “admissible performance measure” if it satisfies the following four minimal conditions. First, it assigns zero performance to every portfolio in some reference set. For instance, if the uninformed investors constitute the investing public, the reference set will then contain all portfolio returns that are achievable by any uninformed investor. More generally, the reference portfolio set can be enlarged to include all dynamic portfolios that are obtainable using public information.
Second, the function is linear so that a manager cannot create
We have two major requirements of a Portfolio Manager:
1. The ability to derive above average returns for a given risk class (large risk-adjusted returns); and
2. The ability to completely diversify the portfolio to eliminate all unsystematic risk.
The client expect from their portfolio managers are to help them manage their money in less time. Most of the client requires a portfolio manager who can preserve their money on time, who can plan in saving of his client according to their need and preferences, who can discuss any concerns regarding money or saving, the client can interact with his appointed portfolio manager on monthly basis.
In summary, constructing a policy statement is mainly the investor’s responsibility. It is a process whereby investors articulate their realistic needs and goals and become familiar with financial markets and investing risks. Without this information, investors cannot adequately communicate their needs to the portfolio manager. Without this input from investors, the portfolio manager cannot construct a portfolio that will satisfy clients’ needs; the result of bypassing this step will most likely be future aggravation, dissatisfaction, and disappointment.
2. What can a portfolio manager do to attain superior performance?
With this in mind, we say a function is an “admissible performance measure” if it satisfies the following four minimal conditions. First, it assigns zero performance to every portfolio in some reference set. For instance, if the uninformed investors constitute the investing public, the reference set will then contain all portfolio returns that are achievable by any uninformed investor. More generally, the reference portfolio set can be enlarged to include all dynamic portfolios that are obtainable using public information.
Second, the function is linear so that a manager cannot create