What is a portfolio investment?
The investment of a portfolio is a strategy that requires an investment, but not actively participates in the management of a company issued by shares or bonds involved in the purchase. This is unlike direct investors who are to some extent involved in the ongoing business. Many investors decide to focus mainly on the portfolio investment opportunities, to see the results of management efforts without contributing to them. This approach is often used in terms of securing foreign investments, but is just as practical in terms of acquiring domestic investment.
With a portfolio investment, the investor's goal is simply to obtain revenues without having to participate in the life of a company issuing shares or bonds. This passive approach allows investors to focus on other matters that are not associated with investment. As long as the investor is considered fair, there is a good chance to keep the investment, keep it in the portfolio and enjoy it forUD dividend payments resulting from ownership. At some point, the investor may decide to buy multiple shares if the investment works well, or decides to sell shares at present, if there is a reason to believe that they will soon begin to reduce value.
The use of a portfolio investment strategy allows the investor to look at how well the investment is doing well than devoting time and energy to the tasks of investment growth. Since it focuses on earnings, the investor will use this approach more to deal with what is happening with the market stocks and decide how to respond to these events. Here, the investor does not have to participate in the company's policy, market planning or other factors managed by investors must constantly deal with.
It is important to realize that portfolio investment does not necessarily mean that the investor holds only a small percentage of shares tradedH on an open market. In fact, it is possible to keep a large number of shares and still not look at the activities of the company that issues these sharing. While the investor may be invited from time to time to vote at investors' meetings or to fulfill some obligation, such as participating in the cast of free space on the board, he will not be interested in actually working on the board or to participate in any other activity associated with everyday business.