Components & Techniques Of Investment Management Companies

As the name suggests, investment management firms work in the best interests of their clients and find the best opportunities to make their money grow. Their function is different from that of dealers or brokers that deal with selling securities. Investment management firms offer advice regarding various investment options besides dealing with successful portfolio management. Here below are the different components of investment management and the techniques that professionals use.

Components of investment management:

• Investment advisory service

Advisory solutions related to investment management services do not depend upon client asset custody. Many times people may choose to maintain brokerage accounts in a different place and seek advice regarding investment from a different place altogether. Advisory services encompass a wide variety of solutions including recommendations regarding industries and securities or current economic assessment.

Other services include giving information regarding market trends as well as interpretation of historical and statistical data. In order to ensure a systematic approach, investment managers require access to account information. This will help them to act as a custodian for specific clients.

• Security research

Investment firms employ analysts and researchers for providing a thorough security analysis regarding different investments. Firms may choose to publish such security reports to the public as an advertising technique. This will attract attention towards the work they do and bring potential clients their way. Subscription-based research and newsletters is a good way to gauge potential markets and help people with the best ways to invest money and security requirements. This is an effective way to grow your public profile and expand your business successfully.

• Portfolio management

One of the important services rendered by investment management solutions is to deal with successful portfolio management for their clients. If you do not have enough time to see if all your investments are in order, you can easily depend upon services that do it on your behalf. It deals with investment diversification rather than specific security selections. They also offer portfolio rebalancing based on risk profile changes related to the portfolio.

Techniques of investment management

• Technical analysis

Market activity generates statistics and the job of technical analysis technique is to evaluate securities using those statistics. Such data includes volume and past prices. Such analysis doesn't deal with the intrinsic value of securities. Instead, their main concern is the use of tools and charts to identify patterns that can shed light on future market activity. One of the important parts of such analysis is to determine price direction on a short-term basis based on historical predicts and price trends.

• Qualitative & Quantitative Analysis

Quantitative analysis is all about quantifying a company based on price and debt to equity, discounted flow of cash, and per-share earnings. Qualitative analysis on the other hand deals with the company quality in terms of management expertise, labor relations, industry cycles, and R&D.

• Fundamental analysis

Fundamental analysis deals with the intrinsic value of securities based on industry and economic conditions along with factors that are specific to a particular company. It will help you to find out where actual good investments reside.

About The Author

Randall Wilkins has been following the market for many years and offers great advice about the best ways to invest money to people in general. His take on the current market scenario and expert investment tips can be found in the many articles and blogs that he writes.