The first thing you should think about is the purpose of your money and why you are investing. A good investment strategy is not about chasing the hot investment product or getting rich overnight – it’s about finding the most reliable way to achieve the goals for you and your family, considering your time horizon, risk tolerance, and costs.
In order to assist investors in achieving particular financial objectives, investment management involves the expert supervision and management of assets, including stocks, bonds, real estate, mutual funds, and other investments. Investment management involves carefully choosing, monitoring, and modifying investments in accordance with an investor’s goals, risk tolerance, and time horizon.
Investment Management components include:
- Defining Investment Goals and Constraints: Goal-setting, Risk Tolerance, Time Frame
- Asset Allocation: Diversification – both strategic (a long term target) and tactical (adjusting based on current economic and market trends)
- Investment Selection and Portfolio Building: Analysis of Securities, Active vs Passive Investing, Risk Management
- Portfolio Monitoring and Rebalancing: Measuring Performance, Adjusting for Life Changes, Shifting asset allocation as needed over time
The systematic process of investment management aims to increase, protect, or provide income from your assets. Investors may manage market swings and aim for the best results by establishing specific objectives, diversifying wisely, choosing appropriate investments, and regularly assessing their progress.