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Morgan Stanley's Dictionary of Financial Terms, describes a "portfolio" as:
If you own more than one security, you have an investment portfolio. You build the portfolio by buying additional stocks, bonds, mutual funds, or other investments. Your goal is to increase the portfolio's value by selecting investments that you believe will go up in price.
According to modern portfolio theory, you can reduce your investment risk by creating a diversified portfolio that includes enough different types, or classes, of securities so that at least some of them may produce strong returns in any economic climate.
There are a number of ideas, to be considered in the definition of a portfolio. For example:
- A "portfolio" can contain many investment vehicles
- The ownership of a portfolio involves choices, like, buying stocks, bonds, etc.
- Making choices involves decisions– what to buy, when to sell, etc.
- A portfolio, and its management, is goal-driven designed to increase in portfolio value
- And, there is a clear risk to the use of the portfolio mechanism.
The ideas and practices from the field of financial portfolio management have been refined and applied in other industry sectors, and to many different types of "investment".
"Project Portfolio Management is a way of evaluating an organization’s projects. It can be compared to an individual’s portfolio of investments. The organization identifies its business goals and objectives, and then selects project “investments” that will best enable it to achieve those goals. The organization “invests” in projects by allocating scarce resources to those projects. It can “sell” its investment by removing resources and ending the project. It realizes returns on its portfolio by achieving its strategic objectives through the successful completion of projects, according to time, budget and scope estimates. The project portfolio is a dynamic entity – projects are continually being proposed and completed, and resources are continually being allocated to and re-distributed among projects. Like a stock market “ticker,” project data must be current to enable managers to make timely and effective decisions."
~ Michael Kaplan, Doug DeCarlo, Kathryn Mathias - May 1999
What is Program Management?
The co-coordinated organization, direction, and implementation of a portfolio of projects and activities that together achieve outcomes and realize benefits that are of strategic importance.
Source: Office of Government Commerce
The centralized coordinated management of a program to achieve the program’s strategic objectives and benefits.
Source: (draft) Program Management Standard, PMIWhat is Project Management?
Project management is the application of knowledge, skills and techniques to execute projects effectively and efficiently. It’s a strategic competency for organizations, enabling them to tie project results to business goals — and thus, better compete in their markets.
Source: Project Management Institute
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