Portfolio Revision

Portfolio Revision

Portfolio Revision is the process of changing the composition of securities or bonds in the portfolio depending on the performance, expectations & the strategy. If the policy of investor shifts from earnings to capital appreciation the stocks should be revised accordingly. An investor can sell these shares if the price of the shares considered risk, quality & tax concessions. If any stock offers a competitive edge over the present stock, investment should be shifted to that stock.

Portfolio Revision Strategies

There are two types of Portfolio Revision Strategies.

1. Active Revision Strategy

   Active Revision Strategy involves frequent changes in an existing portfolio over a certain period of time for maximum returns and minimum risks.

   Active Revision Strategy helps a portfolio manager to sell and purchase securities on a regular basis for portfolio revision.

2. Passive Revision Strategy

   Passive Revision Strategy involves rare changes in portfolio only under certain predetermined rules. These predefined rules are known as formula plans.

   According to passive revision strategy a portfolio manager can bring changes in the portfolio as per the formula plans only.

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