What Is Investment Management?
There are several facets of Investment Management. In addition to the hiring of professional fund managers, the business also involves researching, dealing, settlement, marketing, internal auditing, and preparing reports for clients. Managing such a vast amount of money can be very complicated, and the largest firms are often more complex than most other businesses. For example, compliance staff monitors investment activities and accounts for their own money. Back office staff track thousands of transactions for thousands of clients.
Choosing the right investment manager is important, because there are different types of investment strategies. Investing in a diversified portfolio has its own risks and rewards. The best managers are able to combine a variety of approaches to find the right strategy for each client. Some focus on finding undervalued and overvalued securities. They use a variety of data sources to determine the market value of each security. Other managers use fundamental company analysis and statistical methods to analyze the value of individual assets.
An investment manager’s process begins by analyzing the client’s current financial status. This includes assessing the investor’s net worth, or the value of all the company’s assets and liabilities. They will also review the investor’s cash flow, or the amount of money that the organization generates after expenses and taxes. After assessing these factors, the investment manager will make recommendations based on the information the client provides. Once the client has made their decision, the investment manager can invest the cash.