Types of Investment Management

Investment management is an area of financial planning and management that is concerned with the management of assets or funds in order to achieve specific investment objectives. Investment management therefore, is not only about choosing the right stock or other asset but also has to do with the right time to buy and sell it. This is known as investment risk management and it entails the assessment of the risks involved in a particular investment and the appropriate steps to mitigate such risks to ensure a return on the invested capital. There are several types of strategies used for such management. These include spot or forward investment management; equity risk management; fixed income risk management; and bond and deposit risk management.

Investment Management

Investment management is the discipline of managing the investment portfolio of individuals, companies, and public institutions in order to satisfy set financial investment objectives. The most common assets that are included in an investment portfolio are equities (the term used to refer to stocks, shares, debentures, preferred stocks, and warrants), commodities (excluded in commodity and energy investment portfolios), short and long term government and corporate bonds, money market funds, and derivatives (such as interest rate contracts, stock indices, foreign exchange derivative instruments, and commodity futures). The main objective of this form of money management is to provide stable, predictable income from the investment portfolio. Since the management of assets and funds requires an in-depth knowledge of financial markets and their activities, institutions have employed a wide variety of techniques and tools for effective money management.

This form of financial management refers to the transfer of financial assets from one custodian to another in order to comply with legal requirements and to protect ownership rights. For instance, bank account maintenance involves ensuring that funds are properly deposited on a regular basis to avoid overdrafts and to avoid legal penalties. Insurance management involves arranging and paying for various insurance policies such as savings accounts, annuities, group and individual health insurance, disability insurance, worker’s compensation, and life insurance. Mortgage and refinancing refers to arranging the financing of real estate properties, such as apartments, commercial buildings, single-family residences, condominiums, duplexes, townhouses, residential complexes, row houses, and developments. In other words, this also refers to the financial management of mortgage loans, lines of credit, and credit mortgages.