How to do basic portfolio management?

Portfolio management is the process of selecting and overseeing a group of investments in order to achieve specific financial goals. It involves understanding your financial situation, setting investment goals, diversifying your portfolio, and regularly reviewing and adjusting your investments. Here are some tips for basic portfolio management in the Australian context:

  1. Assess your financial situation: Before you start investing, it is important to assess your financial situation. This includes understanding your income, expenses, debts, and financial goals. This will help you determine how much you can afford to invest and what type of investments are suitable for your situation.
  2. Set investment goals: The next step is to set investment goals. These could be short-term goals, such as saving for a down payment on a house, or long-term goals, such as saving for retirement. Your goals should be specific, measurable, attainable, relevant, and time-bound.
  3. Diversify your portfolio: Diversification is a key principle of portfolio management. It involves spreading your investments across different asset classes, such as stocks, bonds, and cash, and across different sectors, such as technology, healthcare, and finance. This helps to reduce risk and increase the chances of achieving your investment goals.
  4. Choose the right investments: There are many different investment options available in the Australian market, including shares, managed funds, and exchange-traded funds (ETFs). It is important to research and compare different options to find investments that meet your goals and risk tolerance. For more information, a great resource that is available for Australians is
  5. Regularly review and adjust your portfolio: Portfolio management is not a one-time event. It is important to regularly review and adjust your portfolio to ensure it continues to meet your investment goals and financial situation. This may involve buying and selling investments, rebalancing your portfolio, or making other adjustments as needed. A great way to start is by creating a personal balance sheet.

By following these basic principles of portfolio management, you can build a diversified portfolio that helps you achieve your financial goals. It is also a good idea to seek professional advice from a financial advisor or portfolio manager if you are uncertain about how to manage your investments.