Management of investments is basically about managing money and other assets. This may include shares of stock, real estate, bonds, and currencies. It is usually handled by an portfolio manager, which may be a person or an entity, for a client, which may be an individual or an institution such as a company.
A proper investment management takes many steps: personal finances, asset allocation, investment tactics, realization of an investment portfolio, investment management consulting, investment risk management, investment result performance measurement. There are a lot of investment management books and other literature that is writing about those processes.
Investment management is a necessity, especially for big businesses, because of the complexity of the financial processes involved to make them operate, the unpredictability of market indicators, and the changing regulations pertinent to investments. It is as important as profit that the investment is managed properly for it to operate successfully. Hence, the importance of investment management cannot be ignored.
There are a lot of investment management firms out there offering a wide range of services to both individuals and institutions who may be in need of their service. One need only to reach out to them for a consultation to determine which one will satisfy one’s investment management needs.
One must discuss first the objectives of one’s investments to come up with the most efficient plan possible to meet these objectives. Next, investing one’s assets and money on the stock market and other possible investments are settled. The performance of these investments is regularly checked to determine if they are attaining their goals as desired.
The perennial 3 P’s represent the factors as to why an investment manager or firm is successful. The first of these is Philosophy which pertains to the prevailing beliefs of the firm. For example, the way they interpret prevailing market conditions to predict market trends is a sign of their Philosophy. The second is Process which details the steps taken to remain true to the first one. For instance, how they would react if there was a trend on the market in investing the assets of their clients is an indication of the second P. The third is People which refer to the individual/s which make up the firm. Investing in persons who will handle the management of assets is important. If they were a team, this obviously refers to the chemistry of the team and how each one contributes to their success and reaping rewards for their clients.
Investment management for a person or an institution may take on different routes depending on the goals set for the businesses one was investing upon. Investing heavily on a specific segment of the market may not always be a good idea which is why diversification of investments is desired by most investors. This reduces possible risk if a certain segment of the market experiences some lows. That’s how risk management for investing process works. Investing on mutual funds, ETFs, and other areas are considered to have some variations on one’s portfolio.
Investing in the proper management of one’s money and assets is equally important as these assets. So make sure they are guided well.
If you are looking for good investment management firms, you should look at two main criteria: the result and investment management fee structure. Both are very important and have to measured equally. If you are looking for a investment fund, then should focus on ‘total expense ratio (TER)’ which shows all the fees.