📌 Portfolio Management – Key Components

1. 🎯 Investment Objectives

• Define clear financial goals (e.g. capital growth, income, preservation)
  
  

• Align risk appetite with time horizon
  
  

• Set measurable KPIs (e.g. target return, max drawdown)
  
  

2. 🧠 Strategy Development

• Choose between active or passive management
  
  

• Select asset classes (stocks, crypto, forex, etc.)
  
  

• Decide trading style (value, growth, momentum, quant, etc.)
  
  

• Diversify across sectors and geographies
  
  

3. 📊 Asset Allocation

• Distribute capital across asset types (equity, debt, commodities, etc.)
  
  

• Apply allocation models (e.g. 60/40, risk parity, sector rotation)
  
  

• Adjust weights based on market conditions or strategy
  
  

4. ⚖️ Risk Management

• Implement position sizing rules
  
  

• Use stop-loss and trailing stop techniques
  
  

• Monitor exposure to individual assets, sectors, or currencies
  
  

• Track volatility and correlation between holdings
  
  

5. 🔄 Portfolio Rebalancing

• Periodically realign the portfolio to maintain target allocation
  
  

• Rebalance by adding/removing funds or shifting assets
  
  

• Frequency: monthly, quarterly, or strategy-triggered
  
  

6. 📈 Performance Monitoring

• Track key metrics:
  
  

  • Return on Investment (ROI)
    
    

  • Sharpe Ratio
    
    

  • Alpha/Beta
    
    

  • Maximum Drawdown
    
    

• Compare performance to benchmarks (e.g. S&P 500, BTC, custom index)
  
  

7. 📝 Trade & Position Tracking

• Maintain a detailed trade log (date, asset, price, size, reason)
  
  

• Monitor open positions in real time
  
  

• Calculate unrealized and realized P&L
  
  

8. 📊 Reporting & Analytics

• Generate daily/weekly/monthly portfolio reports
  
  

• Visualize performance and risk exposure
  
  

• Use dashboards or reports for internal use or client communication
  
  

9. ⚙️ Automation & Tools

• Use software/scripts to automate data fetching, calculations, and reporting
  
  

• Integrate with broker APIs for live trading and position syncing
  
  

• Recommended tools: Python, Excel, Power BI, Streamlit, QuantConnect
  
  

10. 🔒 Compliance & Audit Trail

• Ensure regulatory compliance (if managing client funds)
  
  

• Maintain accurate records for trades and decisions
  
  

• Audit logs for transparency and accountability