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Related: Investment management
The act or practice of making investment decisions in order to make the largest possible return. Portfolio management takes two basic forms: active and passive. Active management involves using technical, fundamental, or some other analysis to make trades on a fairly regular basis. For example, one may sell stock A in order to buy stock B. Then, a few days or weeks later, one may sell stock B to buy bond C. Passive management, on the other hand, involves buying an index, an exchange-traded fund, or some other investment vehicle with securities the investor does not directly choose. For example, one may buy an exchange-traded fund that holds all the stocks on the S&P 500. See also: Asset management, Investment adviser.