This document summarizes an article on portfolio management in capital markets. It discusses strategies like active and passive portfolio management. The objectives of portfolio management include security of principal investment, consistency of returns, capital growth, and diversification. The essence of portfolio management is that risk management involves reducing exposure to loss, not just rotating between perceived risky and less risky positions. The phases of portfolio management include analyzing constraints, determining objectives, selecting a portfolio, analyzing risk and return, and diversifying. Effective portfolio decisions are the starting point for adequate investment decisions.

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Synopsis
of Article Review
on
The Essence of Portfolio Management
in Capital Market
By CA. Binoy Joy
Submitted by:-
L.Nagarjuna Reddy
Roll no- 26-032
Sec- TPS’A’

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Contents:-
1. About the article
2. Introduction
3. Portfolio Management Strategies
4. Objectives of Portfolio Management
5. Essence of Portfolio Management
6. Phases of Portfolio Management
7. Conclusion
1.About the article:-
Title of the Article :- The Essence of Portfolio Management in
Capital Market
Author :- CA. Binoy Joy
Journal :- ENVISION – International Journal of Commerce
and Management
Publication year :- 2017
Volume :- 11th
ISSN No :- 0973-5976
UGC Certification no :- 62481
2.Introduction:-
Portfolio management is the art and science of making decisions about
investment mix and policy, matching investments to objectives, assetallocation
for individuals and institutions, and balancing risk against performance. Portfolio
management is all about determining strengths, weaknesses,opportunities and
threats in the choice of debt vs. equity, domestic vs. international, growth vs.
safety, and many other trade-offs encountered in the attempt to maximize return
at a given appetite for risk.

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3. Portfolio Management Strategies:-
 Active PortfolioManagementStrategy
• Top-down Approach
The top-down approach to investing focuses on the "big picture" or how
the overalleconomy and macroeconomic factors drive the markets and ultimately
stock prices. They will also look at the performanceof sectors or industries. These
investors believe that if the sector is doing well, chances are, the stocks in those
industries will also do well.
• Bottom-up
The bottom-up investing approach, a money manager will examine the
fundamentals of a stock regardless of market trends. They will focus less on
market conditions, macroeconomic indicators, and industry fundamentals.
Instead, the bottom-up approach focuses on how an individual company in a
sector is performing compared to specific companies within the sector.
 Passive PortfolioManagement Strategy
Passiveportfolio management strategy refers to the financial
investment strategy wherean investor makes an investment as per the
fixed strategy that doesn’tinvolve any forecasting. Itstresses on minimizing
the investing fees and avoiding the unpleasantresults of failing to correctly
predict the future.
4. Objectives of Portfolio Management:-
 Security of Principal Investment
 Consistency of Returns
 Capital Growth
 Marketability
 Liquidity
 Diversification of Portfolio
 FavorableTax Status

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5. Essence of Portfolio Management:-
The problem is many portfolio managers believe they manage risk through their
investment selection. That is, they believe their rotation from one seemingly risky
position to another they believe is less risk is a reduction in risk. But, the risk is the
exposure to the chance of a loss. The exposure is still there. Only the perception has
changed: they just believe their risk is less. For example, forthe last thirty years, the
primary price trend for bonds has been up because interest rates have been falling. If
a portfolio manager shifts from stocks to bonds when stocks are falling, bonds would
often be rising. It appears that trend may be changing at some point. Portfolio
managers who have relied on bonds as their safe haven may rotate out of stocks into
bonds and then their bonds lose money too. That’s not risk management.
6. Phases of Portfolio Management:-
 Analysis of constraints
 Determination of objectives
 Selection of portfolio
 Risk and return analysis
 Diversification
7. Conclusion:-
The effective decisions of modern investment portfolio become the starting
point for adequate investment decisions. The adequate portfolio model is more
suitable for investment, when stocks in portfolio are fromdifferent sectors.
Meeting the challenge of developing an effective portfolio approach for the
company is no small task. In today‘s business environment, thereis no question
that portfolio management is a vital issue.A number of companies, however, are
developing, implementing and achieving better results fromtheir portfolio
management approach.