What Is Investment Management?

Written By
I. Mitic
May 17,2024

Meeting your financial goals and establishing a proper investment plan requires research and a lot of planning. It isn’t uncommon for people to end up with 401(k)s from their former jobs and a half-finished online course on stock investment as their only attempts in that direction. If this rings true for you, then you should consider investment management.

What is investment management? Although you might have heard otherwise, investment management isn’t necessarily about handing over the reins to your investments to an experienced professional who understands your financial goals and knows what to do with your assets, although that, too, is a legitimate approach.

You can also try to invest independently. Today, there are many AI-based services that can help you manage your finances on your own, without expert (human) help. The first step in that way would certainly be to learn all you can about investment management. 

Investment Management Definition

Investment management is, in essence, creating and taking care of an investment portfolio. It includes devising an investment strategy, buying and selling assets in accordance with it, and allocating portfolio assets in the most lucrative way. Again, this is something you can do yourself, but you can also employ an advisor to do it for you. We’ll discuss both options in this article.

Investing Independently

Any beginner’s guide to investing will tell you that handling your investments yourself is much easier today than ever before. The reason for that is that people who are new to investing now have at their disposal a range of tools and services to help them successfully invest and build their financial stability.

Robo Advisors

These AI-powered investment advisors use algorithms to find suitable investment options for you for far less money than your regular manager might take as a commission. 

Some robo advisors also have additional features that can guide you through the world of investing, such as goal-planning tools. However, investing with this high-tech tool still requires a lot of learning about investing and finding the right automated investment advisor

IRA Accounts

You need an individual retirement account as a part of your portfolio. You can get one at your bank, with a broker, or even at robo advisors. These accounts are typically tax-advantaged investment accounts. 

Why is setting up an IRA important? The best IRAs can get you closer to a comfortable retirement quicker, as you can save more than you would with a regular account thanks to various tax deductions IRAs are eligible for. 

Stocks Investment for Beginners

With the right online stock brokerage platform, you’ll most certainly be able to get a grip on how things work in no time. Just bear in mind that investing in shares and stocks is a long-term investment. It’ll have its ups and downs, but on average, it has high chances of paying off.

Should You Do It Yourself?

It all depends on your particular situation. Before taking the reins of your investments, consider whether you have enough time for it. Persistence is also important - if you know already you’re likely to quickly lose interest in the whole thing, you might consider hiring someone to manage your portfolio for you.

It is not an unusual approach. Most financial experts would define investment management as the process of handling a client’s portfolio. That’s why people instantly think of investment management companies when the term is mentioned rather than handling their investments themselves. 

Hiring an Investment Manager

These professionals, also known as fund or asset managers, typically work with stocks, equities, or commodities to ensure that you reach your financial goals by creating and managing your portfolio. Some investment managers also work with insurance companies, educational institutions, pension and retirement funds, and even governments.

Investment managers know how to make an investment that pays off and can help you with financial planning and advising, including estate and retirement planning, asset distribution, going over your financial statements, and creating a proper mix of bonds and stocks in your portfolio. The primary reason to hire an investment manager is their invaluable help with coming up with a short- or long-term strategy to help you bank, budget, and reach your financial goals successfully.

When Should You Hire an Investment Portfolio Management Service?

Contrary to popular opinion, investment management isn’t only for the rich. If you already have multiple investment accounts or assets such as an inheritance to manage, you should consider hiring someone to help you consolidate them, create a plan, and put these assets to good use. 

Having someone who knows what they are doing handle your assets can be a relief, especially during important or challenging times in your life. Other times, you might need help putting things in the proper perspective. You might also consider hiring someone when you’re learning to invest but aren’t confident in making big decisions on your own. After all, any investment carries a certain amount of risk, so it’s always advisable to seek a second opinion.

A good investment manager will advise you about which investment products you should look into, what to steer clear of, and help you make the right decisions about your financial future. 

The Bottom Line

Whatever you decide - to start navigating the investment waters on your own or to hire someone to do it for you - we advise you not to hesitate too much. In the investment world, time really is money. So, pick up an investing guide or find the right manager and make those assets work for you - your older self will thank you for it.


What are the four types of investments?


The four main types of investments are cash, bonds, property, and shares. Cash as an investment type has the lowest potential returns but allows for liquidity in case things take a turn for the worse. Bonds are undoubtedly the safest option with a low return potential, and property investment has high return potential while carrying significant risk. Stocks are a volatile but safe investment in the long term. 

What is the investment process?


The investment process can be viewed as a guide to investing, a list of steps that investment managers follow to help them execute a successful investment strategy. The investment process comprises the following steps: creating a portfolio, proper selection of assets, risk estimates, asset allocation, and evaluating the portfolio’s performance.

What does an investment manager do?


Investment managers help their clients create, plan, and improve their portfolios, advise them on their investment options, measure the portfolio’s performance, allocate and reallocate assets, buy and sell stocks, and much more. For some advice on when you should hire an investment manager, read our “What Is Investment Management?” guide above.

About author

For years, the clients I worked for were banks. That gave me an insider’s view of how banks and other institutions create financial products and services. Then I entered the world of journalism. Fortunly is the result of our fantastic team’s hard work. I use the knowledge I acquired as a bank copywriter to create valuable content that will help you make the best possible financial decisions.

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