A Complete Guide on What is Portfolio Management?

Portfolio management is all about planning the strategies, executing the plan by collaborating with the team members, and getting feedback on the project portfolio, ensuring that your organization can design the projects, executes them, and bring the desired results by filling up the gap between the planning and its execution perfectly. 

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Professionals grab the attention of the viewers by publishing their work as proof that they do with that particular skill, stock of products, services they are offering, or investment.

It has become the need of this era to present your professional financial products or skills proof and get the customers. 

It also shares your past work experience with your customers that ensures them that they are not lying or selling others products or skills, but it reflects the financial assets that you have made in the past. 

It is not only about creating a portfolio only but also about managing it, but most of us do not know that what portfolio management is. If you are running investing, you are investing in a business either selling products, real estate, or offering your services, you should know about creating a portfolio and what portfolio management is to cope up with financial investments and get their outcomes as you expect according to the modern age.

Everything you need to know about what is portfolio management?

To understand what is portfolio management, you should have a general idea about what is portfolio and how to create it. As described shortly about the portfolio, it reflects the essence of bring up-to-date as per the requirements of the modern age so that your business can level up with the market's standards. 

What is portfolio management?

It is a series of steps to bring all your efforts into a single plane to get your financial goals by dealing with multiple projects. Portfolio management is all about planning the strategies, executing the plan by collaborating with the team members, and getting feedback on the project portfolio, ensuring that your organization can design the projects, executes them, and bring the desired results by filling up the gap between the planning and its execution perfectly. 

  • You are playing a long-term game while working on portfolio management takes years for completion, or you may say a continuous process until or unless you are standing with an organization.
  • You being a manager, can manage two or more projects by implementing the portfolio management method as it can lead you to get the right outcomes for your organization.
  • If you are still thinking about what is portfolio management, here is the answer, aligning the steps with the collaboration of your team to maximize the return for the investment that your organization has made by selecting the right mix of investments

. Here you need to play tactfully and smartly to have the staring in your hands that you can take any action when you need instead of leaving everything on the luck or facing a lot of loss. 

Is portfolio management similar to project management?

Some new entities are confused between project management and portfolio management as they think these processes are the same, and we can deal with them in the same way. This is a wrong concept as some sharp boundaries share the clear-cut differences between project management and portfolio management processes. Some of the important and very clear contrast between these two processes has been shared below. 

Project management follows deadlines while portfolio management proceeds for a long time.

If we talk about project management, it is a single process in which we follow some steps to complete the task till the deadline, and after that, we are not working on it anymore, or you may say for the long term. It becomes history, or we start a new relevant project as its extension. Project management is somehow easy and needs less effort and concentration for a fixed period that is known or informed before it starts.

While if we talk about portfolio management, it is somehow different from project management as it is not a short-term task that you will be doing with your team and other managers, but it is a long-term project that requires more time and concentration for completion, or you may say it continues almost for years or almost whole life in different ways and a portfolio manager needs to update it or maintain it to keep it worth.

Many projects are part of a portfolio 

Let us discuss another very clear difference between the project management process and portfolio management process that is the number of projects or tasks. The project management process consists of several tasks that a project manager assigns to its team members and takes their follow-up to ensure either there are on the right track or not. It passes through various steps for the successful completion of a project.

  • While if we talk about portfolio management, it is not about only one project and some tasks for a fixed period. 
  • Portfolio management consists of many projects that a portfolio manager needs to deal with at a time, but he can solve this problem by prioritizing the projects according to their importance and the deadlines. 
  • Portfolio management deals with a group of projects that are called project programs at a time working parallel on it. 

A portfolio manager aligns the projects and assigns them to different teams having relevant skills and experience.

Proper planning of project management while rough and flexible planning of portfolio management 

Project management is a small process that requires fewer team members, equipment, and time for its completion but with a quick response. So, it needs a proper alignment and arranged planning along with clear details of each step to ensure the quality completion of the project. Different tasks are performed by different team members and the project manager passes them from different processes to keep them on track and check their performance.

While if we talk about portfolio management, it is not like the project management or a portfolio manager makes the clear sketch for the portfolio management. A portfolio manager makes a rough sketch of different projects or programs and assigns the duties to the rest staff, including other managers and the team members.  

Steps to make you understand that actually what is portfolio management

It is not to simple process to understand what is portfolio management as it includes several processes or steps to ensure the success of your project portfolio. The important processes necessary for portfolio management are listed below as you start from achieving the goals of the project, then programs, then portfolio management, and at last, you get your strategic goal. 

Prioritization of the multiple projects in a portfolio  

In portfolio management, you are not working on a single project till the deadline, and then it ends. You are working on multiple projects to achieve the strategic goals of an organization for which you are working as a portfolio manager. 

  • All the projects do not need your attention at the same time so, you can categorize them by putting the first project first and then the next to be very clear and specified about the projects.
  • You can manage two to three projects at the same time by aligning the processes and collaborating with your team.
  • While working on portfolio management, do not forget to categorize and prioritize the projects as per their deadlines, importance, and need to be completed. 
  • It will help you to work with sequence and in alignment instead of doing random work that will never lead you towards success. 

Project management leads you to program management and then portfolio management. It is a chain of series of events that continue to occur one after the other. You will never lose at groups of projects and make remarkable victories for your organization.

Identification of goals and objectives for the portfolio 

After prioritization of the projects, identify the objective and goals of the portfolio that your company is trying to develop and execute. You need to be very clear about what the investor wants from his portfolio and how you can ensure him the desired outcome by putting the projects in the queue making them a program. 

Without objectives and goals, you will never find the right direction that will lead you to the path of reaching your destination. The objective of each investor is different from the other as it may be about more products manufacturing and selling, lower down the risks, or meeting the future requirements.

It is important to identify the goals or objectives of an organization or an investor. This step leads to the identification of goals to the needs of the customers of the organization or an investor. Suppose if you are working as portfolio manager for an educational organization before you start portfolio management, you should know its long-term goals and objectives, like providing innovative and creative study patterns. You will work on learning projects more than introducing the cramming system. It will help you to assemble the set of acts or strategies to achieve this goal by keeping you on the right track and taking turns where you need.

Adoption of win-win strategy to be on safe side financially 

Another important thing after prioritization and identification of the goals and objectives is to adopt the way to keep your organization on the safe side financially that you can do by choosing the best asset of investment to ensure the lower risk of loss. In this step, you will be choosing the right strategy to set the securities very clearly.

 It is very important to keep your organization safe from financial risks and maintain the balance by keeping security that if any customer tries to escape, he will not be harming your finance, but you will be keeping his security to cope up with the loss that might be caused by him.

So, adopt a win-win strategy by allowing some leverage from your side and keeping the security of the customers to ensure the right things happen with you. Security may vary as per the department or type of organization, their investment limits, and the tendency of bearing the risk. So, decide the suitable mix leverage strategy to be at low risk and loss. 

Choosing type of portfolio strategy to ensure the success of the portfolio 

There are different types of portfolio management that people adopt as per the need and choice for long-term and market competency projects. There are two basic types of portfolio management process existing in the nature that you can adopt 

Market beating or active portfolio management 

The active type of portfolio management is highly risky and for the experienced people who know the tactics to deal with the ups and downs of the market. 

This type of portfolio management requires high investments to beat the market as in this the manager of the portfolio will be trying to take turnover more than the market by following multiple strategies that can bring huge turn over as compared market. But it can also increase the risk of loss if you are new and not aware of the market rules, its ups and downs, and the right time to invest more. 

For active portfolio management, you should have a strong grip over the market's quantitative observations and quality turnover over the season. 

Not market-beating or passive portfolio management 

Most investors like to choose the passive type of portfolio management as it is with low risk because in this portfolio management, you are not going to beat the market. Passive portfolio management works on the fundamentals of the markets that are almost the same for all assets, and it goes on for term projects. 

Looking into security setting strictly to ensure safety 

After adopting the suitable type of portfolio management, you require to ensure the security of price, bonds, or shares by keeping a strict eye on the analysis regularly. In this process, the portfolio manager analyzes the investments' security and the turnover that they are getting to ensure to avoid the risk of losing this game. You should do an analysis deeply to check the nature of risk that you can face during management. 

Here, you can use two types of analysis named micro and macro analysis depending on the nature and extent of analysis. If you are doing a simple analysis of turnover on the investment, you are doing a simple analysis, but if you are analyzing the market security by doing critical thinking and observing the market very closely, you are approaching macro analysis. 

Execution of the plan practically. 

After analyzing security and another set of processes, you may say after planning the portfolio management that which way you will be adopting for this. You will move toward the next process called the execution of the plan practically. 

This is the step where you need to collaborate with your entire team and other project managers, if any. This is a very sensitive process of portfolio management as all the planning you have made previously will reflect itself here. Now you will be declaring the products you are buying and selling with their appropriate percentage after analyzing the fundamentals of the market. 

Execution of the plan will decide the outcome actually that you have made after passing through a long series of processes of planning to launch the right execution. If your planning are on track and your portfolio related, there are most likely chances to get the desired outcomes keeping the security as your safety. 

Monitoring and reviewing the portfolio on intervals 

After the execution of the plan, you are not all done with portfolio management. You need to look at it continuously by checking the turnover percentage and comparing it with the previous one. It will reveal the fact either it is going well or not. You monitor the executed plan, whether it is going on track or needs some amendments. 

The portfolio manager needs to monitor the portfolio management script and compare it with the market. By doing so, he can better decide what he needs to add or remove from it to take it up to the level of the market. 

Reviewing the portfolio script will help you to follow the right track to achieve the long-term goals of the organization you are working for.

Analyzing the feedback of portfolio 

It is an important part to understand what is portfolio management process?  Analyzing the portfolio and its performance will help you to analyze the risk rate you were expecting and the risk you are facing on your portfolio. For this purpose, the professionals use special software to compare both perspectives and find out the exact results. This evaluation of the portfolio performance will help you to bring useful feedback that will open the facts about the portfolio and allow you to bring some new ideas to update the set of the portfolio management process. 

Advantages of learning what is portfolio management

If you are thinking that why do you need to learn that what is portfolio management, then you will be pleased after finding the answers below as it comes with multiple advantages for you and helps you to prove to improve your business by improving some short or little steps of this process. Some of the most important benefits of portfolio management are listed below that will force you to adopt this process next time for the growth of your organization by keeping the portfolio managed. 

1. Helps to categorize the projects 

The portfolio management process is a complete guide to put first thing first if you do not the organization of the projects in a portfolio and assigning the task to the team members as per the project they are working for and their specialty. The portfolio management process is highly effective for categorizing the projects as they need attention time and more concentration as compared to the other projects. It will help you to choose the right set of projects, the program to lower down the risk and ensure success. 

2. Take a broad view of all aspects

Portfolio management not only helps you to organize the projects and put them in the right kingdom and work on the hierarchy but also helps to work for multiple tasks at the same time and pushes you towards innovation as you become more creative and multi-talents and better know that how can you make the big picture visible to you and your team members. It will let you know that the importance and short or long-term capacity of the project sets if you follow the hierarchy keenly.

3. Makes you clear about the goals of the investors 

You cannot start a portfolio management process until or unless you do not know the goals of the investor or the organization for which you are managing the portfolio. The goals and objective of the organization help you to design the work layout to proceed for bringing out the desired results as the owner of the organization or the investor have asked you.

 The portfolio manager does not organize the tasks randomly but he uses the tactics to reach the desired results as said by the organization by keeping the results in mind. You may also say that it makes you more proactive, gives you goal setting vision, and helps t=you to work on the strategies to bring solid outcomes.

4. We will use the resources smartly

When you are more organized, proactive, and sure about the acts you and your team members are going to make then you and your team will know very well that which resources you and your team will be using and how will you operate the process to get more effective results.

5. Decreases the rate of risk

There are very low chances of risk and loss if the portfolio is well-organized and up-to-date. This is the most prominent advantage that every investor wants in his portfolio. 


If you follow the portfolio management process, you are going to stand up high in the market of the well-organized and most famous set of the organization even if you are a beginner as it brings many qualities that make you a successful portfolio manager. You will learn in this article about the difference between project management and portfolio management, steps to proceed with this process, and what you will get as a benefit after implementing portfolio management.

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