Active approach to managing

The practical realization of this principle means that the restructuring of the portfolio securities should be reflected in the calculation of the market, but do not reflect the current dynamics of it. This approach is characterized by an individualized assessment of future market prices of securities with a subsequent inclusion in the restructured portfolio of undervalued in the current period securities. Active approach also deeply individualized methods for predicting market securities, based mainly on the methods of technical analysis. Active management assumes that: the financial manager always performs a detailed analysis of market conditions, benefits are achieved as a result of buying securities at the lower points of the current fluctuations in market value and selling them at high points, investments are not sustainable, they are short term and significant costs to upgrade of portfolio-related information, analysis, expertise and commercial activity in the securities market; active bull speculation in undervalued securities; action game for a fall from overvalued securities, significant speculative turnover of the securities that comprise the portfolio, the active purchase and sale, an attempt to "beat" the market, diversified portfolio of predominantly, a significant proportion of individual promising securities, which is concentrated portfolio risk. Of the financial manager in management: transfer of funds, purchase of securities in anticipation of good results and sales shortly before they are announced (the price at the time the dividend is declared usually fall); speculation new issues of securities, the constant search for stocks and sectors with low prices, as well as companies are reorganized, track market sentiment. Category: Management Operations Commercial Bank