Investment management refers to the process of building a portfolio. It may include but is not limited to bonds, stock, and investment vehicles that are important to an individual’s financial growth. Different strategies exist in investment management depending on the profile of an investor. The end goal is to achieve the rate of return that a client needs at an acceptable level of risk. Investment management can be done with the help of an investment professional or individually.
The process
The process involves three key pillars. The first is to determine the investor’s end goal and the risk level they are willing to accommodate to achieve their goals. The next step involves seeking possible investment avenues based on the risk profile of the investor as well as the desired rate of return. This step may be done by an investment analyst who can sift through data and assemble various options a person may invest in. The last step involves creating a portfolio of the different investment vehicles an investor requires to achieve their financial goals. Portfolio investment may be made through investment banks such as Goldman Sachs or investment firms like BlackRock.
Investment managers
The end goal of investment management is the growth of a given portfolio within acceptable risk levels. Working with an investment manager is brilliant as they devise strategies to achieve the desired return. The manager is tasked with working on the investor’s portfolio, spreading the investments, and monitoring overall portfolio performance.
It is advisable to use investment managers when not confident of making independent investment decisions, dealing with a change in income, and dealing with complex financial issues. They can help guide an investor’s portfolio to ensure the financial objectives are met while not overly exposing them to risk.
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