What is accurate comparison?

Accurate comparison in finances concerns the strategic management of bond portfolio, where the portfolio with the lowest costs generated by the inflow of cash is exactly equal to the outflow of cash that the investment finances. Part of the goal is to decide on investments to achieve the greatest possible return on investment. Portfolio management can be classified as active or passive. The investor or portfolio manager actively participates in the trading of securities to achieve a short -term profit. Passive management is a place where the investment is included in the fund, which is set up with certain percentage in various investment securities. In this case, investors do not directly choose where the funds are assigned. The indexing system attempts to create a portfolio that provides accurate performance comparison and selected Bond portfolio index. It is selected for the ability to monitor the index. Buy-and-hold technique is simply buying a bond and holding up to date.

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Bond portfolio management aims to minimize the level of risk and maximize the amount of investment return. The investor chooses a specific level of risk and invests appropriately. The acceptable risk will depend on the personality of the investor and the life phase. For example, someone who is young and aggressive can choose a high -risk bond because it offers a higher interest rate. However, the pensioner may be less willing to take high risk and invest more conventional.

Exact comparison techniques include elements from both passive and active management strategies. The investor or manager is trying to equalize the obligations at certain times of the bond portfolio to alleviate the exposure of the company's intensity. Monitoring of continuous and multiple transactions is required to achieve the object of avoidance or reduce risk.

The most conservative method of accurate comparison is a clean reserved portfolio with a compared money. A bond portfolio that offers a number of payments is establishedand ripening bonds that create accurate comparison between payments and future obligations. This category includes bonds that are set up for pension funds or tuition fees. This strategy is a passive portfolio that would not require reinvesting. There are also dedicated portfolios with cash comparison that use a smaller initial fund that provides timely payouts and then reinvested.

The most important element of the exact comparison strategy is the ability to have the required amount of funds at a time when these funds are needed. The risk is a factor that depends on a particular investor and its goals. Regardless of specific objectives and acceptable risk, investors of the typical of the selection of securities that best fit their situation.