Portfolio Management Methods Flashcards

This set covers the core methods used to build, manage, and evaluate investment portfolios. It begins with foundational ideas such as goals, risk tolerance, time horizon, liquidity, and the investment policy statement that records them. From there it moves to diversification and modern portfolio theory, including correlation, the efficient frontier, and common risk measures. The later groups compare passive and active approaches, explain major asset allocation strategies, and finish with rebalancing and performance evaluation methods such as time-weighted return, alpha, beta, and drawdown.

To study effectively, read each card's question first and answer it aloud before reading the explanation. Work through the groups in order, since later topics build on earlier definitions. Pay close attention to the reasons behind each method, not only the terms, because exams and real decisions often ask why a strategy suits a particular investor. Review any cards you miss, and try to connect each concept to a simple example, such as a two-asset portfolio with a stock fund and a bond fund. Finally, revisit the cards after a few days to strengthen recall.