Comparing Portfolio Management to Investment Management
Portfolio management is one facet of investment management. While those managing portfolios are also managing investments, general investment managers may also assume other roles and responsibilities that are not part of a portfolio manager's typical duties.
|Job Title||Educational Requirements||Median Salary (2018)*||Job Outlook (2016-2026)**|
|Portfolio Manager||Bachelor's degree||$84,383||11% (financial analysts)|
|Investment Manager||Bachelor's degree||$93,273||8% (managers, all other)|
Sources: *PayScale.com; **U.S. Bureau of Labor Statistics
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Responsibilities of Portfolio Managers vs. Investment Managers
Investment managers have a wide range of duties beyond handling investments, and the term encompasses portfolio managers as well as other financial experts, such as certified financial planners. Investment managers may develop comprehensive investment strategies for their clients or work exclusively as a stockbroker. In addition to trading stocks, these investment managers also collaborate with research staff to identify which stocks clients should buy or sell. The work they do can inform the choices that portfolio managers make about investment options. Some portfolio managers focus exclusively on monitoring financial data. They use this information to identify long-term investment options called index funds.
Portfolio managers can be responsible for developing an overall investment strategy for their clients. They may also focus on monitoring specific investment options, which is known as indexing. Portfolio managers work in offices, but also spend time out of the office meeting with investors. They must carefully scrutinize all information to make effective investment recommendations, so they need attention to detail. Financial analysts and others in the finance industry can pursue opportunities to advance to the role of portfolio manager once they've gained practical work experience.
Job responsibilities of a portfolio manager include:
- Evaluating market conditions
- Recommending investment options to clients
- Preparing reports for clients
- Projecting expected returns from investments
- Evaluating performance of portfolio
- Altering investments when necessary
Investment managers perform a range of tasks, including buying and selling investment options such as stocks, real estate and shares. Their objective is to meet the financial goals of their clients through sound investments, and they must regularly report on the performance of investments. The role of an investment manager is an advanced position that requires practical work experience in the finance industry, and employers may also prefer applicants who have completed a graduate degree in finance or a similar discipline. Overtime is common in this field, and investment managers regularly travel. In addition to strong mathematical skills, investment managers also need to be able to make decisions so that they can determine when to purchase or sell investments.
Job responsibilities of an investment manager include:
- Meeting with clients
- Evaluating investment options
- Producing financial documents and reports
- Developing projections for expected returns on investments
- Monitoring economic factors that can affect investments
- Overseeing analysts and other staff
Individuals interested in becoming portfolio or investment managers may also be interested in managing hedge funds or working as a market risk analyst, since these professions involve evaluating market conditions and developing investment strategies. Information about these careers is available through the links provided here.