Why is Portfolio Management Important?

The United Kingdom has struggled over the past decade with regards to the economy – some recent examples include Tata Steel pulling out of its UK operations and British Home Stores going into administration. So the need to be wise with investments and other important factors like this are more influential to a business than ever.

This is where portfolio management comes in – and here is what you need to know on what portfolio management is and why it is important for a business.

What is Portfolio Management?

To start off with, the term ‘portfolio’ needs to be understood. A portfolio refers to a collection of investment tools that depend on the investor’s income, budget and time frame. Some examples of these could include stocks, shares and bonds. Portfolio management is the art and science of selecting the right investment policy for individuals in terms of minimum risk and maximum profit. It is essentially the management of an individual’s investments (in the form of bonds and shares) so that they can earn the maximum profit within a specific time frame.

Finance Concept

What are the Benefits of Portfolio Management?

One of the most prominent benefits of portfolio management is that it is a great way to minimise investment risks and it also increases the chance of making profits. So because of this, it essentially maximises the amount of profit your company gets, which is beneficial for the company (or business) and its growth.

Portfolio managers can understand a client’s financial needs and suggest ideas, strategies or methods which can give the best and most unique financial policy for them, keeping in mind that the risks involved will be minimised.

Another benefit that portfolio management has to offer is that it can increase collaboration and communication within a company or business. In many organisations, senior managers or CEOs make the financial decisions while only taking into account their department – this doesn’t include any other involvement so it can result in two separate divisions having conflicting ideas. By introducing portfolio management, every division within the organisation has to be involved, which greatly increases the communication within the company.

Strategy in business and finance

Why is Portfolio Management Important in A Company?

The simple answer to this is that with the addition of portfolio management, a company can be stronger and more connected internally (due to increased collaboration and communication) and a company can gain more profits and returns through ideas governed by the portfolio managers – all of these come together to make a company or business more successful.

Business

Here at RB Surveyors, we are trusted to act as retained surveyors for a number of leading high street retailers, pension funds and portfolio management companies. Our surveyors are chartered surveyors, meaning that our company is regulated by the Royal Institute of Chartered Surveyors (RICS). Contact our team if you have any enquiries with regards to surveying, and we will be delighted to help.

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