Portfolio Management Guide — Active vs Passive

Portfolio management is the art and science of selecting and overseeing a group of investments that meet the long-term financial goals and risk tolerance of an investor.

🎯 Goal

Maximise returns while keeping risk at an acceptable level, aligned with your personal financial objectives.

⚖️ Two Approaches

Active Management – A manager actively picks stocks, times the market, and tries to outperform a benchmark index.
Passive Management – You mirror a market index (like the S&P 500) via low-cost funds. Studies show passive strategies often beat active managers over the long run.

🔄 Key Steps

Define your financial goals & timeline
Assess your risk tolerance
Choose an asset allocation
Select specific investments
Monitor & rebalance regularly

Risk vs. Return

~2%

~4%

~7%

~10%

~??%

Higher potential returns come with higher risk. Average annual returns are approximate & historic.