Final answer:
Portfolio management is the centralized oversight of a group of investments to achieve strategic objectives. It can include different forms, such as mutual funds or writing portfolios, and involves the control of several unrelated investments.
Step-by-step explanation:
The centralized management of one or more portfolios to achieve strategic objectives is known as portfolio management. Portfolio management involves overseeing various investments in portfolios, which could include projects, programs, subsidiary portfolios, and operations, without the necessity for them to be interdependent or directly related. This differs from managing an individual investment, as it seeks to balance and achieve broader strategic goals.
For instance, a mutual fund is a form of portfolio that is professionally managed, offering the benefit of liquidity and the potential for increased returns without significant risk. Portfolios can consist of varying types such as a writing portfolio, which might include a collection of someone's writings over time displayed in a single location, or an online portfolio that showcases professional and academic capabilities to potential employers digitally.
Another example is international portfolio investment, where an investor buys financial assets in another country, like government bonds or bank deposits, often without taking on management responsibilities. These financial moves require transactions in the foreign exchange market as the investor exchanges their domestic currency for that of another country.