How an Investment Manager Shapes Your Portfolio

The goal of a professional Investment Manager is to direct the investment of various securities and assets in order to meet the specific, personalized financial needs of every client. By analyzing the risk tolerance, life stage, market conditions, and unique priorities of each investor, an Investment Manager assembles a customized strategy tailored to meet an individual’s short and long term investment objectives.

This means that, rather than implement a one-size-fits-all approach, an Investment Manager in Glenview adjusts the allocation of assets and financial securities in order to shape each client’s portfolio. For example, a client looking for growth, who has a higher risk tolerance, would probably invest more heavily in equity positions such as equity mutual funds and stocks, whereas a client with lower risk tolerance and/or an emphasis on earning income may build a portfolio with a greater proportion of fixed income instruments.

In addition to the initial development and implementation of a financial strategy, an Investment Manager is expected to continuously adjust and analyze an investment strategy over time. For instance, as a client reaches retirement, their financial needs will likely need to be adjusted towards a more income-based, conservative portfolio as a way to protect their assets from market volatility. In addition, if one sector of an investment portfolio outperforms the others, the desired proportion of assets assigned towards that sector will be inflated, distorting the intended goals of that individual’s portfolio. In such cases, the role of an Investment Manager is to regularly redistribute, or “rebalance”, assets within a given portfolio to ensure the client’s financial objectives are maintained.

While each client’s personal and financial situation largely dictates the design of an investment strategy, it is important to recognize that the approach and overall analysis of market conditions will undoubtedly differ from one Investment Manager to another. Therefore, it is crucial to consider whether or not a given Investment Manager is the right match for your needs. For example, an Investment Manager’s definition of a “conservative” or “aggressive” portfolio is subject to interpretation. 

Investment management must account for a multitude of variables in order to be effective, including income needs, available resources, risk tolerance, diversification, market conditions, and the distribution of financial instruments. In sum, the primary functions of an Investment Manager are to preserve a client’s objectives by assigning resources into the desired proportion of financial instruments, diversifying investments, hedging risk, reallocating assets based on market trends and economic conditions, researching potential investments, monitoring fund/stock performance, and keeping clients informed about portfolio performance and potential investment opportunities. For more information on investment management, click here.


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