INTRODUCTION
To understand PORTFOLIO MANAGEMENT we first need to understand few basics. Let us have a look at it by answering few questions.
1. What is an investment?
Every man lives on hopes. But one cannot live his live only on hopes there are many materialist things such as food, clothing, shelter etc. When his current ability (current income) exceeds his current needs (current expenditure), he saves it for the future. This money is saved with a hope to consume it in future. This money may be buried inn backyard or hidden under the mattress.
In the contrast if some person’s current income is less than his current needs than he would have negative savings or borrowings. But, the lender of he money who forgoes his current possession and consumption will ask for more than what he lends.
To understand PORTFOLIO MANAGEMENT we first need to understand few basics. Let us have a look at it by answering few questions.
1. What is an investment?
Every man lives on hopes. But one cannot live his live only on hopes there are many materialist things such as food, clothing, shelter etc. When his current ability (current income) exceeds his current needs (current expenditure), he saves it for the future. This money is saved with a hope to consume it in future. This money may be buried inn backyard or hidden under the mattress.
In the contrast if some person’s current income is less than his current needs than he would have negative savings or borrowings. But, the lender of he money who forgoes his current possession and consumption will ask for more than what he lends.