Why could we have not foreseen the changes? What analysis was made by us and
others?
Answers have to be searched for above key questions in the process of evaluation of
portfolio performance. For this purpose every transaction has to be evaluated to ascertain
whether the decision regarding the purchase, sale, timing, duration, amount and return,
was profitable or not. To assess the necessity to continue a security in a portfolio,
evaluation is required. Finally portfolio as a whole has to be evaluated. The most
important point is that the evaluation must be timely. An appropriate period for the
portfolio evaluation must be determined. Otherwise the evaluation report is likely to be
misleading.
The evaluation report shall be used for corrections and refinement of portfolio structure.
(Acknowledgements to Professors S.K.Barua, V.Raghunathan and J.R.Varma for their
Book on Portfolio Management)