The Real Work Begins: Managing Your Investment Portfolio

D

The correct answer is D. A and B both.

Once a portfolio is invested according to the plan, the real work begins in managing the portfolio to ensure it continues to align with the investor's goals and objectives. This involves ongoing evaluation of the portfolio's performance and updating the portfolio based on changes in the market, the economy, and the investor's personal circumstances.

A) Evaluating the portfolio's performance involves analyzing the returns generated by the portfolio and comparing them to the investor's expectations and the benchmarks set for the portfolio. This analysis helps to determine whether the portfolio is meeting its objectives and whether any changes need to be made to improve performance.

B) Updating the portfolio based on changes involves adjusting the portfolio to reflect changes in the market, the economy, and the investor's personal circumstances. For example, if interest rates are expected to rise, a portfolio manager may adjust the portfolio's allocation to fixed income securities to reduce interest rate risk. Similarly, if the investor's risk tolerance changes, the portfolio may be adjusted to reflect the new risk profile.

C) Examining current and projected financial goals is also an important part of managing a portfolio. This involves understanding the investor's current financial situation, as well as their long-term financial goals. By examining current and projected financial goals, a portfolio manager can help the investor develop a customized investment plan that is designed to achieve their objectives while managing risk appropriately.

In conclusion, managing a portfolio involves ongoing evaluation of performance, updating the portfolio based on changes, and examining current and projected financial goals. Therefore, the correct answer is D. A and B both.