Investments. Financial regulation of portfolio investments (most important)

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Investments. Financial regulation of portfolio investments (most important)

Lecture notes, cheat sheets

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FINANCIAL REGULATION OF PORTFOLIO INVESTMENTS

Investment portfolio - a set of investment values that serve as a tool for ensuring a high level of investment income, the preservation and growth of capital in the future, ensuring the liquidity of the investment portfolio, the acquisition of securities for scarce types of products, raw materials, property and non-property rights, expanding the scope.

Adjusting the portfolio, the investor proceeds from the investment strategy and achieves its liquidity and a low degree of risk. Basic principles of portfolio investment regulation: security, profitability, liquidity of investments, growth.

The stages of investment portfolio regulation are distinguished:

1) selection of the optimal type of securities portfolio for a given type of investor;

2) assessment of an acceptable combination of risk and income by different levels of income in the portfolio. It is decided taking into account the general investment rule: the greater the risk of a security, the more significant income it should bring;

3) assessment of the liquidity of the portfolio is considered from two positions: the ability to quickly convert the portfolio into cash; the ability of the joint-stock company to timely repay its obligations to creditors who participated in the formation of the securities portfolio;

4) determination of the quantitative composition of the portfolio; the investor must determine how many types of securities should be in the portfolio;

5) determination of the initial composition of the portfolio and its possible change taking into account the conditions prevailing on the securities market (demand and supply of stock values). Given stock portfolio structures, an investor can be aggressive or conservative.

Each type of securities is assigned a certain fixed share in the stock portfolio, which is stable. The stock market fluctuates in the price of securities. The investor adheres to a flexible scale of shares of securities in the total portfolio. It is formed from weight ratios between types of values. Subsequently, the weight ratios are adjusted based on the analysis of the business situation in the stock market and changes in demand for securities.

The investor actively uses options and futures contracts to change the composition of the portfolio, changes in prices on the stock market.

In the process of regulating portfolio investments, the goals of the investor may change, this leads to a change in the portfolio. Portfolio renewal comes down to revising the ratio between the return and risk of incoming securities.

In the future, the goal of portfolio investment regulation is to maintain those investment qualities of the investment object for which the securities portfolio was created.

Author: Kuznetsova S.A.

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