Investment management is the discipline, which is concerned with the financial management of funds, including stocks, bonds, shares, and other financial investments, for the advantage of investors. It involves the analysis, identification, selection, reporting, allocation, and evaluation of the financial risks and rewards associated with investments. The objective of investment management is to provide information about the performance of a company to investors so that they may make investment decisions. The key functions of the investment manager are also to manage the investment fund, buy and sell securities under regulated securities exchanges, and coordinate the investment plan with financial advisors, banks, or other external sources.
Other main functions of the investment manager include reducing the risks of investments through appropriate risk control measures, maintaining financial liquidity, making sure the investment product matches the need of the customer, and maximizing the return on investments. It can be broadly categorized into two main categories as capital management and financial portfolio management. Capital management includes such activities as buying, selling, and providing mortgage finance and real estate loans. Financial portfolio management, on the other hand, deals with investments in financial assets such as corporate bonds, mutual funds, and insurance portfolios. These include equities, derivatives, interest rates, and mortgages.
A wide variety of investment management services include asset allocation, stock selection, estate planning, risk management, and international portfolio administration. All of these require skilled professionals who have the ability to pick and choose investments, identify risks, and make appropriate decisions. The main objective of any manager is to successfully apply the planning and investment strategies to generate the maximum returns. The various skills required for each specialization involve finance, economics, law, and accounting.
