Benefits Of The Financial Services Industry Outweigh The Disadvantages

1396 Words Sep 18th, 2016 6 Pages
Investment has become a growing tendency and a method for people dealing with their income, while portfolio is an important investment vehicle. In the same time, financial services industry has played a critical part in making investment portfolio available to ordinary people. In this essay, the meaning and functions of portfolio will be analyzed and it will argue the advantages of the financial services industry outweigh the disadvantages.

Firstly, portfolio theory has become an essential strategy in the modern investment market. In general, according to Elton (2011), it is a common situation that each person may possess a portfolio which is combined with real assets such as a vehicle or a house, including financial assets such as stocks and bonds. An investment portfolio is a series of chosen securities for investing purpose. In order to avoid risks or pursue for profits, investors are faced with enormous number of choices. If one is considering structuring an investment portfolio, the alternative composition of various assets seems overwhelming. So how to make a decision and what is a good , even best portfolio are the points in the first part.

As Clark and Kim (2013) said, portfolios are the objects of choice. A great amount of information is needed for investors to make a decision because it is smarter to divide the money in different assets instead of concentrating on a specific financial product. Portfolio analysis was created by the Nobel laureate Harry Markowitz…
Open Document