The portfolio theory used for making the portfolio is Capital Asset Pricing Model Theory. According to the theory, when an investor buys a riskier stock, he would like to get rewarded for the extra risk he is taking by buying that stock. Hence, in situation of market equilibrium, a stock should provide an expected return that compensates for the amount of risk, in particular, systematic risk that cannot be avoided through diversification, associated with it. The greater the systematic risk associated with that stock, the higher the returns the investor would expect from it. The model explains the relationship between the systematic risk associated with a stock and its expected return. In this model a stock’s expected return is the risk free rate of return (generally return on Govt. Treasury bonds is taken as risk free rate of return) plus a risk premium based on the stock’s systematic risk.
The portfolios once build needs to be rebalanced and churned on at different time perspectives. This part analyzes the rebalancing strategies used and the theory underlying those strategies. There are many reasons why the portfolio may have to be changed. According to the utility theory, the risk taking ability of the investor increases with the increase in wealth. It says that people can afford to take more risks as they grow rich and benefit from their rewards. Also, as time passes some events take place that may have an impact on the time horizon of the investor. Also, with time market opportunities and liquidity needs of the investor inspires to rebalance the portfolio. Fluctuations in the stock markets often provide opportunities for the investors in both positives as well as negative aspects. The disciplined investment decisions land value by providing the objective basis to confidently pursue uncomfortable investments.
为使投资组合的投资组合理论、资本资产定价模型理论。根据这一理论，当投资者购买高风险股票，他想获得的额外风险他正在通过购买股票的回报。因此，在市场均衡的情况下，股票应该是提供一个预期的回报，补偿金额，风险，系统风险，避免不能通过多样化，与之相关的。更大的系统风险与股票相关的，高收益的投资者会期望从它。该模型解释了一个股票的预期收益与系统风险的关系。在这个模型中一支股票的期望回报率的回报是无风险利率（通常是政府债券回报率作为无风险收益率+风险溢价率）基于股票的系统风险。
一旦建立投资组合需要平衡和生产在不同的时间观念。本部分首先分析了平衡策略和这些策略的理论基础。有很多原因，投资组合可能会改变。根据效用理论，风险投资者的能力和增加财富的增加。它说，人们可以采取更多的风险随着他们的成长，从他们的奖励丰富和效益。同时，随着时间的推移，一些事件发生，可能会对投资者的时间跨度的影响。同时，随着时间的推移和市场机会的投资者流动性需求激励平衡投资组合。在股票市场的波动往往为积极投资者的机会以及消极的方面。纪律的土地价值的投资决策提供客观依据自信地追求不舒服的投资。
