Financial Portfolios

Paper Summary:

This paper discusses fixed income and equity portfolios. The paper describes the types of securities often used in fixed income portfolios, then compares them with the securities of an equity portfolio. The paper discusses the management of a fixed income portfolio as well as the risks involved in investing and gives professional opinions on both. The paper includes five professional sources as evidence.

From the Paper:

"Fixed income portfolios were created to offer the financial investor a more secure means of investing, while at the same time taking the least amount of risk with as many financial gains as possible. In contrast, the equity portfolio is greatly diversified with risk factors incorporated into its structure and it can be highly susceptible to financial factors, which could mean substantial loss for the investor. This is not to suggest that fixed income securities are not without some investment risk. Many elements play a role in the management of fixed income securities, and without proper management, either portfolio type is subject to negative returns. Management of a fixed income portfolio relies on the financial manager creating a dependable stream of income for the client, while seeking to create the highest yield on investments over the course of time."

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