Abstract

The portfolio management process is an integrated set of steps undertaken in a consistent manner to create and maintain an appropriate portfolio (combination of assets) to meet clients’ stated goals (Maginn 2007). The three fundamental elements in managing any business process are planning, execution, and feedback. The same steps form the basis for the portfolio management (PM) process. During the planning step, investment objectives and policies are formulated, capital market expectations are formed, and strategic asset allocations are established. During the execution step, the manager constructs the portfolio and integrates investment strategies with capital market expectations to select specific assets for the portfolio. Finally, during the feedback step, the manager monitors and evaluates the portfolio compared with the plan. Any changes suggested by the feedback must be examined carefully to ensure that they represent long-run considerations. It is profound that the portfolio management process has several dimensions. As will be proved, the framework of multiple criteria decision-making (MCDM) provides a solid methodological basis for resolving the inherent multicriteria nature of this problem.

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