Active Portfolio Management
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Active equity portfolio management is an attempt by the manager or investor, to outperform, on a risk-adjusted basis, a passive benchmark portfolio.
The benchmark portfolio’s average characteristics match the risk-return objectives of the client if it is an overall portfolio of the client.
Active Portfolio Management Strategies
1. Fundamental analysis approaches
Top down approach: Country rotation, asset class rotation, sector rotation
Bottom up approach: Selecting stocks for buy on the basis of undervaluation on value/growth basis and selecting stocks for sell on the basis of overvaluation on value/growth basis. Event driven trades.
2. Technical analysis approaches
Continuation of trends approach
Contrarian approach (overreaction)
3. Anomalies and attributes
Calendar effects (weekend, January)
Security characteristics (P/E, earnings momentum, firm size)
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http://knol.google.com/k/narayana-rao-kvss/charles-on-dow-on-trading-and/2utb2lsm2k7a/148
Reviewed on 3.4.2011
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Short urls
http://knol.google.com/k/narayana-rao/active-portfolio-management/2utb2lsm2k7a/152
Narayana Rao - 10 Nov 2011
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