Investment management is the discipline, devoted to optimizing the allocation of investment assets, resulting in the creation of a portfolio that is capable of bringing returns to the investors. This process involves the careful analysis of investment-related variables, such as current market conditions, objectives of the organization, risks, and time period for achieving the objectives. Investment management is an essential part of corporate management, especially for large companies. It includes financial planning, asset allocation, investment research and categorization, management of investment portfolios, decision-making, and reporting.
There are several types of investment management. One is cash flow management, which is concerned with cash inflows and outflows. Cash management involves the allocation of capital assets (usually fixed assets) into different accounts, such as short-term and long-term holdings. In addition, there are some specific types of investment portfolio such as balanced portfolio, wealth management portfolio, and other hybrid systems.
The term "investment management refers to the whole range of financial management, which deals with the purchasing, selling, managing, and accumulating of financial assets. These include liabilities (liabilities), assets (assets), and financial investments. Other related terms are portfolio theory, financial theory, asset allocation strategy, and portfolio optimization."
One of the main purposes of investment management is to meet the needs of their clients. Clients may differ in their goals. Some may want to achieve maximum return on investment (ROI). Other may want to earn a return on their principal investment over a long-term period. As per industry standards, investors' needs vary according to age, investment type, net worth, risk tolerance, number of beneficiaries, and financial objectives.
Investment managers are primarily concerned with the financial success of the company. They assist with financial planning, asset allocation, capital budgeting, and asset protection. Apart from helping their clients meet their investment goals, investment management services also ensure that the clients achieve financial freedom. This freedom results in peace of mind. Therefore, they perform other crucial functions such as tax planning, estate planning, and charitable giving.
Investment managers should be qualified professionals. They should have a strong background in finance, accounting, economics, marketing, and any relevant related fields. Most importantly, they should possess excellent interpersonal skills. Managers interact with their clients on a regular basis, providing them valuable information about their investment options, helping them make the right investment decisions. Clients can work with qualified investment managers or with investment consultants.
Some funds cater to specific segments of clients, while others offer a full range of products to all categories of investors. For instance, some specialize in the elderly sector, while some others provide a comprehensive range of products to corporate clients and wealthy individuals. In addition, some offer an entire array of products for wealthy individuals, while other companies focus only on high-end clients. Clients should investigate each company's offerings to make sure they are the best match for their investment goals and tolerance for risk.
Clients should choose investment managers that understand their needs and can meet those needs. The investment manager should be able to discuss their investment objectives with clients and select the appropriate asset classes to help them reach their goals. For instance, a corporate investor may need a portfolio that provides total return while allowing some growth in investments. An individual investor may prefer growth with a predetermined amount for a set time period. To best serve their needs, clients should select a qualified investment manager. Moreover, they should evaluate investment managers through credit checks and review their performance history.
