In: Nursing
What are the pros and cons of using portfolio analysis? In your opinion, which dimensions contribute more information?
PORTFOLIO: is a financial term denoting a collection of investments held by an investment company, hedge, fund, financial institution or by an individual. PORTFOLIO ANALYSIS: is a systemic way to analyze the poducts and services that make up a portfolio business. PROS OF USING PORTFOLIO ANALYSIS: 1. it evaluate each of the organization's business individually to set objectives and to allocate resources to each organizations. 2. it supplement management's intuitive judgement to stimulate the use of externally oriented data. 3. It raises the issue of cash flow availability for use in expansion and growth of the organization. CONS OF PORTFOLIO ANALYSIS: 1. It is not easy to define the product or market segments. 2. It provides an illusion of scientific rigor when some subjective judgements are involved. DIMENSIONS: In my opinion, risk tolerance is considered as the main factor to determine. Most assets which give high returns are also highly risks. This creates needs to assess the loss on an asset.