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Management Investment – Getting It Right

In a business enterprise, finance links all the functional areas such as production, personnel and marketing, so management of finances is the key to the smooth operation of the organization. The basic financial operations are investments, which deal with acquisition of fixed assets; financing, which deals with raising required funds from various sources; and profit appropriation, which deals with appropriating the profit earned by the enterprise among the suppliers of funds.

Selecting the right investments

The right way to select investments is by considering their net returns. To enable financing for the investments, the organisation should seek financing at the lowest possible cost. Similarly, profit appropriation requires that sufficient funds are provided for the developmental activities of the enterprise, without impairing the interest of the suppliers. In an organisation where these operations are planned and controlled properly it can be said that there exists efficient investment management. Investment management therefore is that part of managerial activity which is concerned with the planning and controlling of the financial resources of a firm.

Management Investment – the centerpiece of business activity

Every business activity requires investments and investment management is closely related with other areas of management. When investments are managed properly, other areas will also show good performance. Investment management helps in monitoring the effective deployment of funds in fixed and working capital. This ensures better functioning of the enterprise.

Whether large or small, all the operations and resources in a business organization are managed with the same broad objective of meeting the organizational goals. For this to happen each resource or area should be managed in such a way as to contribute to the fulfillment of the objective of enterprise. It must be remembered that there are specific objectives for each functional area. In the case of investment, the objective is to ensure that the firm obtains the required finance at the lowest possible cost, and uses it in the maximum beneficial way.

What is investment portfolio management?

Investment portfolio is a collection of investments that include savings and retirement accounts, mutual funds, bonds, stocks and real estate, Managing these investment portfolios is a difficult process. Market values and economic factors are changing day by day. So, investment portfolio management is mostly done by professional asset managers of banks.

Commercial banks are the most important agents in managing investment portfolios. Some banks have facilities to manage assets and some others to manage financial portfolio. In banks, the strategy is adjusted on the basis of consultations made with the client. With the help of investment advisers, banks help investors to achieve their needs and goals. Some people prefer managing investment portfolio by themselves. Individual investors usually seek the help of financial professionals in banks or other brokerages. These professionals give instructions as to how portfolios can be rebalanced to attain performance goals.

Evaluating your situation and exploring opportunities

Management investment is a complex process. A management investment advisor can help you with plans that will help you meet your goals by evaluating your situation and exploring opportunities for your growth and success. This will help you understand the challenges you face and guide you in making the right investment decisions.

A management investment advisor will first get some information from you concerning your goals, family, assets, tax rate, risk tolerance, liquidity and income needs. You will then be given options and recommendations regarding stocks, pensions and irrevocable trusts that match your investment profile. You and your advisor will develop an investment plan utilizing stocks, bonds, cash and other investments that are structured to fit your needs and lifestyle.

Monitoring your investments

One you have your investments in place you will be given an investment policy statement so that you know what is being done and how it's being done. Should changes occur, ongoing evaluations of your situation will occur and meetings with your investment manager will take place regularly. It is important to stay in contact with your investment management advisor, because of the constantly changing climate in the financial world. Values of commodities rise and fall with world events and with the natural fluctuations of the world economy. You will have to stay abreast of these factors through your advisor.

Every individual and company requires a good financial health and management of investments is critical to financial success. This calls for management, experience, knowledge, skill and above all patience. One can choose to gradually acquire these skills or get the advice of a professional to launch an investment portfolio.