1.6. COMPARISON OF IT PORTFOLIO MANAGEMENT AND FINANCIAL PORTFOLIO MANAGEMENT

Stock traders and money managers of mutual funds tailor a portfolio of investments based on their customers' risk and reward profile, with a keen understanding of the fundamentals associated with investments in the portfolio. Regardless of whether money managers oversee a risk-averse or a highly risky portfolio, the objective is to maximize investment return at an acceptable risk level. As conditions change, money managers must make buy, sell, and hold decisions concerning individual projects and initiatives within portfolios. Money managers are able to communicate in real time the overall performance and value of the portfolio they manage. The liquidity of the majority of their investments means that investments can be bought, sold, or traded with minimal effort.

In addition, money managers have many metrics to compare their performance with other fund performance and investment alternatives. It is important to note that money managers have an immense amount of relatively reliable and standardized information regarding individual assets within their portfolio such as annual reports, financial statements, industry and analyst reports, competitor information, and so on. The tools used for analysis of financial portfolios are generally well established. However, Enron and Worldcom remind us that surprises can occur from time to time.

IT portfolio management leverages many of the rigorous constructs and ...

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