What is Investment Management

Understand what investment management is and how it can help you to grow your portfolio.
Investment Management
4 min
14-June-2024

Also read: Smart investments

Advantages and disadvantages of investment management

Let us now see the pros and cons of investment management.

Advantages

  • Helps individuals achieve their financial goals
    Investment management helps individuals assess their financial objectives and develop suitable investment strategies. It allows individuals to create a sufficient corpus to meet their short-term as well as long-term goals, such as retirement.
  • Reduces risk in investment
    Investment management involves conducting a comprehensive risk assessment to understand the investor’s unique risk profile and implement suitable investment strategies. Some examples of such methods include diversification and hedging. They help reduce the overall risks in the investor’s investment portfolio.
  • Access to a broad range of options
    Investment management offers investors access to a wide array of investment opportunities, including stocks, fixed deposits, bonds, mutual funds, real estate, and alternative investments. It allows for a well-rounded portfolio that can adapt to changing market dynamics.

Disadvantages

  • Expensive
    Investment management services can be costly in the form of high expense ratios and sales charges.
  • Unethical practices
    In some cases, investment managers may misuse their position and engage in illegal or unethical practices, such as misrepresenting client’s investment risks.
  • Volatile investments
    Investments in financial markets are prone to volatility and can lose value over time. Investment managers may be unable to mitigate or prevent losses in all cases.

Tips for successful investment management

Here are some tips to help you manage your investments effectively:

  • Diversify your portfolio: Do not put all your eggs in one basket. Diversification helps reduce risk and protect your investments from market fluctuations.
  • Invest for the long term: Avoid making impulsive decisions based on short-term market movements. Focus on building a portfolio for the long haul.
  • Stay disciplined: Stick to your investment plan and avoid emotional investing.
  • Rebalance regularly: Review your portfolio periodically and make adjustments to maintain your desired asset allocation.
  • Seek professional help: If you are unsure about managing your investments, do not hesitate to consult a financial advisor.

Also read: What is investment

Conclusion

Investment management is the process of building a portfolio of different types of investments, such as stocks, fixed deposits, and bonds, after carefully assessing the client’s financial goals. The process involves conducting thorough research, implementing various investment strategies, and consistently monitoring portfolio performance and market trends. Investment managers play a key role in helping clients optimise their investments and navigate the complexities of financial markets. Individuals can manage their portfolios independently or hire an investment manager.

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As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

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