Investment management is the process of managing investments such as stocks, bonds, and real estate with the goal of achieving specific financial goals. A portfolio of assets is created by the investment manager based on the inventor’s risk tolerance, investment goals, and time horizons. It is done with an aim of achieving a certain level of return on investment while minimizing risks. Investment management services are generally provided by financial advisors, investment managers, and wealth managers. A specific amount of fee is charged by them for their services which are based on the percentage of assets under management or a flat fee.
In this article, we are going to discuss the range of activities that are involved in investment management. If you are interested in sharing your knowledge about other areas related to business and finance, you can write a guest blog on our platform Write For Us Business and Finance.
Range of activities involved in investment management
A range of activities are involved in investment management, these are:
- Risk management: you need to identify and manage risks associated with an investment. For example, market risk, liquidity risk, and credit risk.
- Portfolio management: construct and manage a portfolio of investments that meets the objectives of the investors, while taking into account their risk tolerance, time management, and other factors.
- Asset allocation: this involves how to allocate assets across different types of investments. For example, stocks, bonds, and real estate. These are based on the investor’s objectives and risk tolerance.
- Investment analysis: you need to evaluate the financial and economic factors that affect the value of an asset or investment, like, financial statements, market trends, and economic indicators.
- Performance measurement: you need to track the performance of the portfolio from time to time and compare it to a benchmark or any other valid standard.
You should keep some steps in mind throughout the investment management process.
- Provide ongoing reports and communicate to the investor about the portfolio’s performance.
- Create a diversified investment portfolio.
- Conduct investment research to identify potential investment opportunities.
- Monitor and adjust the portfolio as needed. Also, ensure that it remains aligned with the investor’s goals.
- Understand the risk tolerance, time horizon, and financial goals of the investor.
Overall, investment management involves the professional management of various assets by professionals such as investment managers, financial advisors, and wealth managers. The fee charged by them covers the cost of investment research, reporting, portfolio management, and other related services.
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