Investment Management

What is investment management?

Investment management can be one of the most complex jobs in finance. It is sometimes challenging to define because it means numerous things to different people. It meant something completely different to me when I was managing money for large banks & insurance companies than it does now. Managing money for institutional investors can be complex for many legitimate reasons. Managing money for individuals should be made as simple as possible.

At its simplest, investment management refers to the handling of financial assets—not just buying and selling. This includes, but is not limited to, deciding what to invest in, when to invest, and how much to invest to meet your short and long-term goals.

There are several different components to investment management, including asset allocation, asset location, diversification, and risk management.

• Asset allocation is the process of allocating assets to different categories or types of investments according to a predetermined strategy. Assets can be allocated based on risk tolerance or with a specific goal in mind, such as retirement savings.

• Asset location is the process where assets are placed in the most advantageous accounts in a multi-asset portfolio. 

• Diversification is the process of dividing your investments among various asset classes in an attempt to better align risk with return.

• Risk management refers to actions taken by investors when faced with uncertain events that could negatively impact their portfolio performance.
  

What does an investment manager do?

Investment managers are a vital part of the financial industry. They manage client assets by developing an investment strategy to meet their goals and then investing accordingly in appropriate stocks, bonds, and other financial assets. A good investment manager will make the most of your money and ensure every dollar is optimized for financial growth. A good investment manager will not necessarily outperform the market. A good investment manager will allow you to capture as much of the market’s return as possible, doing so in the most tax-efficient manner possible.

How Verbatim Financial can manage your investment portfolio

Investing is a crucial step in improving your finances by allowing you to invest successfully in the future, not just the present day. In an ideal world, investment portfolios would include just a few carefully selected index funds. Unfortunately, for a long while, that strategy was not well-publicized, and by the time we reach the middle of our working careers, we often have any number of individual stocks, mutual funds, & the like. My goal is to simplify client portfolios as quickly and efficiently as possible, at as low a cost as possible. We accomplish this together by:

• Developing and regularly reviewing personal or family Investment Policy Statements. Frequent review will ensure your goals and objectives align with current investment strategies.

• Performance monitoring. A well-constructed Investment Policy Statement should eliminate the need for regular trading, but even simple portfolios cannot be ignored.

• Discretionary asset management. You pass off the burden of day-to-day responsibilities while still maintaining control of the process. 

• Portfolio rebalancing. Periodical realignment of your portfolio of assets to maintain the mix spelled out in the Investment Policy Statement. 

• Tax-loss harvesting. When securities sales are necessary, this strategy helps minimize owed taxes and improve overall investment returns.