Many types of investments are available; ranging from those which will protect and retain capital, to the more aggressive derivative securities. Investors select investments to meet personal income goals and requirements, including interest income, capital growth, dividend income, and rental income.

Today, investors search beyond local markets for higher returns and foreign market diversification opportunities. Diversification plays an important role in lowering risk through the development of a portfolio that includes a number of different asset classes.

There are four steps in investment portfolio management:

1) Identify investment objectives, preferences, and constraints and determine the resulting investment policy that is then documented.

2) Determine and apply an investment strategy through the choice of specific financial and real assets, using the guidance of the investment policy statement.

3) Monitor changes in market conditions and the circumstances of the specific investor.

4) Adjust the portfolio to take into account any changes that occur.