Investment Management is the scientific application of various techniques, which are aimed at maximizing the return on investment and minimizing risk. This field includes financial, economic, and probabilistic principles and applications. It is a highly diversified discipline, in which current and prospective investors are considered as the primary agents. The term Investment Management is often used interchangeably with Investment Banking or Managerial Finance, especially when the two disciplines are included within one framework. The two are very different from each other as the former focuses on long-term planning whereas the latter deals with short-term aspects and daily financial activities.
Investment Management refers to the professional skill of investing, both professionally and personally, in order to create a valuable asset portfolio, with the main aim being asset allocation. The strategies and techniques of managing the wealth of an individual are best handled by experts in this branch of business. The principles of money management include effective savings, investing in productive real estate, liquidating nonperforming assets and categorizing risks among others. Investment management is a growing industry and many people are now involved in it as a profession. In United Kingdom, there are several institutions and colleges that offer courses related to investment management.
The most important feature of professional investment management is its ability to provide efficient advice, while assisting clients in meeting their particular investment goals. In order to achieve this, investment management firms help their clients in identifying the suitability of the various investment options, while helping them make well-informed decisions. Moreover, they help their clients develop a systematic and effective plan, which should be implemented according to individual investors’ circumstances and goals. Their assistance can be sought at different stages of an individual investor’s career, ranging from advising about investment opportunities and making specific investment choices to advising about company proposals and structuring asset portfolios for maximum returns.