Why do you need the service of a dedicated portfolio manager?

Portfolios need not only be constructed, but also be managed.  This is one of the main activity of a Portfolio Manager. When stock prices, bond prices or other assets prices change, the portfolio asset allocation become off balanced and may need to be rebalanced in order to maintain percentages set originally.  Different techniques are used to achieve this objective.  Choosing a certain strategy will impact performance and volatility.  This is all part of your Investment Policy exercise.

Passive Asset Strategies

The Portfolio Manager either use a  constant mix or a constant proportion strategies to rebalance investments in order to maintain original allocations.

Active Asset Allocation

The  Portfolio Manager periodically changes the portfolio components or the components’ proportion within the portfolio in order to maximize return and or minimize risk. An Active Asset Allocation strategy is one in which the composition of the portfolio is dynamic or tactical.