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Portfolio Management or Trading

What is Portfolio Management? Why is it so Sought After?

As a Portfolio Manager, think of yourself as a shock-proofer. Right question, what are you shock proofing? Consider the position of Portfolio-Management as two standalone terms. Starting with Portfolio, it is an accumulation of financial assets or possessions of a company. These assets can be of different types – from a simple asset as cash and its equivalents, to something as diverse as stocks, bonds, mutual funds and other company investments. Thus, a portfolio is built of assets collected by a business to strengthen its economic pillars and use these investments to grow further. That being said, the owners of investment portfolios need someone to play these cards right for them. This is where the ‘Management’ part comes in the picture. The individuals managing these financial securities inside the portfolio arrange them in such a way that they extract profits, reduce investment risk, and stabilize the risk of the under-performing.

Thus, Portfolio Management is shock-proofing and arranging assets in a way that provides a comprehensive profitable return, absorbs the overall losses (if any) and further helps in multiplying these profits. A Portfolio Manager evaluates the investor’s profiles and policies, juxtaposes it with the investment market, and prepares and executes a plan to realize optimal profits. Portfolio Managers helps investors in choosing the right move for their portfolios, helping them take decisions such as whether growth is more important than safety of capital or how to balance trade-offs of risk and reward.

Qualification Needed for a Career in Portfolio Management
An academic credential that is well-respected in a career like Portfolio Management is Chartered Financial Analyst (CFA), which is considered one of the most difficult tests to pass even for the investors working on the Wall Street. However, a candidate with proficient Quantitative, Financial, Accounting, Economic and steady understanding of the Business world manages to attain this career asset. Additionally, a qualification of an MBA, with specialization in Finance and demonstrated interest in the field of Capital Markets and Investments are well suited for Portfolio Management.

Skills Needed for a Career in Portfolio Management
Since this field is detailed and specific in terms of underlying expertise, the skills needed too are defined in nature. The first ones from the lot would be a strong capacity to regularly juggle with numbers. With the frame of investment, one needs to be with their good with Math and Accounting skills. A keen knowledge about the Business scenarios, market and investment culture is a must. Also, strong conviction and convincing skills play a huge role in the making of a successful Portfolio Manager. Convincing skills to assure your clients about the safety of their investment is another must-have. .

Next in the lot are negotiation skills, which come handy both while talking to the clients, and while investing via brokers. Portfolio Managers, who do well are quite facilitating towards their clients, and understand business operations clearly to manage and govern funding process. Hence, good planning and structuring skills will facilitate effective management of an advantageous portfolio.

Hierarchy in Portfolio Management Career
The position of an Analyst makes for the ground work needed for becoming a full-fledged Portfolio Manager. Whereas Business graduates start off as Research Personnel for the post of Assistant Portfolio Managers, an MBA from a reputed Business school gets a position of Assistant Portfolio Manager where one can research and act their part. As an Assistant Portfolio Manager or a Research Analyst, one will work on smaller projects first to get their feet wet into the exhaustive investment-oriented career.

After a few years of alliance with reputed firms, good track record of steering investment strategy for the firm, one heads to the stage of Portfolio Manager. It has been noticed that well doing Portfolio Managers have over seven years of experience to the least.

Pros of a Career in Portfolio Management
The very first advantage that one can think about is attractive salary. Apart from this, the career promises early responsibility, high visibility, and immense opportunity for growth. The career also offers a steep learning curve and is always intellectually stimulating. Working with the brightest and most demanding professionals on Wall Street has its own perks. Over the years, Portfolio Managers also develop a wider skillset including working in large teams.

Cons of a Career in Portfolio Management
Handling multiple projects and manoeuvring though major economic events can be taxing. The Portfolio Manager’s work environment is always high pressure and it does not reduce as one climbs the career hierarchy. Working on weekends is normal and seldom does one have much flexibility with personal plans. The industry is intensely competitive and people are profit hungry by nature, which often results into critics calling it an immoral professional.

Physically, much of the day is spent in the cube for hours, pouring over financial statements, churning out spreadsheets and presentations. Early on, there are a few chances to get out of the office, but the same is not guaranteed to increase with hierarchy, unlike what happens in most other career paths. The industry is known for its low tolerance for errors too. Analysts must be able to learn quickly and always work to a high standard from day one, paying close attention to detail.

Who is a Career in Portfolio Management good for?
One’s ability to take risks and decisions to invest in a particular security based on one’s analysis and market study will lead one to a successful career in this field. If one has a passion for numbers and has mastered economics and accounting, this could be a good career option. Religiously studying the stock market will equip you with the understanding of the market dynamics, thus enabling you to take decisions for your client’s portfolio.

Best Companies for a Career in Portfolio Management

  • BlackRock
  • Vanguurd Group
  • State Street Global Advisors
  • Fidelity Investments
  • Allianz Asset Management
  • JP Morgan Asset Management
  • BNY Mellon Investment Management
  • PIMCO
  • Credit Suisse Group
  • AXA Group
  • Covered by…