Portfolio management is one of the most important success factor when it comes to personal finance.

As we move through different stages of life, we tend to do different things, pick up certain knowledge and set various goals. Because of the psychology involved, endless changes and unknown factor of the market dynamics, it becomes a very interesting chapter where there is always something to think about. 

This has become something where everyone has a part to play for throughout their life journey and is something where we are able to control within our grasp if we do it properly. 

Generally speaking, everyone started off from the wealth accumulation stage at first where savings take priority because we assume the majority of folks are starting off from ground zero. 

From the moment we are young when we tend to receive occasional red packets or allowances from our parents, some of us will work towards saving these monies and cultivate a good habit. These will continue for the longer duration of our teenager lives where we polish our skills in only buying things that we really need, source for budget tickets when we travel, find movie tickets during weekdays and spend lesser on fine dining luxuries.

When we grow up and join the workforce, the immediate action is to continue saving even more aggressively because this is now the real deal where we have a higher income combined with a lesser commitment, which makes things more dependent on how we shape things up. 

During this accumulation stage, we are also probably thinking of how to grow our money conservatively by investing in certain asset classes which can bring about positive returns which will compound over many years to come. The idea when doing this is to start slow, small and cautious because we were all once beginners and we tend to get carried away with things that we have not experienced in life. If we can just do this, we will slowly but surely be compounding our returns over time positively instead of the other way round, which can be detrimental to our wealth building. I spoke about this in my last written article here.

This is probably also a great time to be focusing on our career path as they are the best bet for what is to come in the future. Even if we have set our goal for an early retirement, we still need the best help we can get from climbing up our career ladder as higher income means higher savings (assuming we can control our expenses) which means higher money for investment which we can use to compound even more. Even if things does not work out eventually with our investment, we have a backup to fall for. There are clear tangible benefits by doing well in our career, especially in the early stages - little doubt about that. 

As we grow older, there will be a shift in priority from wealth accumulation towards wealth preservation over time. 

The general idea here is to reduce more volatile asset classes such as equities and increase in more predictable asset classes such as cash and graded bonds. 

The rule of thumbs to use here is holding cash/bonds equivalent to the age we are in that year. So if I am 31 year old for instance, I should ideally be holding a minimum of 31% in cash/bonds in my portfolio, everything else equal. 

The reason for doing this is diversification and as we grow older, we can probably take lesser volatility as age and time is a finite resource. The odds of every asset classes imploding at once is a lot lower than the odds of a single asset class imploding. 

The evolution of the personal portfolio management will continue to change as we become better over time and find one that best suit our profile. The importance of it cannot be under estimated and everyone should take them with a pinch of seriousness if not already by now.