If you are interested in the financial markets and want to help individuals and institutions achieve their investment goals, then you might want to consider a career in investment management. Investment management is the professional management of various securities and assets, such as stocks, bonds, real estate, and commodities, to meet specified investment objectives for the benefit of the investors. In this article, we will provide you with a comprehensive guide on how to get into investment management, what qualifications you need, and what career prospects you can expect. Whether you are a fresh graduate or a seasoned professional looking for a career change, this article will help you understand the basics of investment management and how to pursue it as a career option. This article is brought to you by Vninvestment, a leading online platform for investment education and advice in Vietnam.
| Topic | Key Takeaway |
|---|---|
| What is Investment Management? | Investment management is the professional management of various securities and assets, such as stocks, bonds, real estate, and commodities, to meet specified investment objectives for the benefit of the investors. |
| Why Choose Investment Management as a Career? | Investment management is a rewarding career that offers intellectual challenge, financial compensation, and social impact. Investment managers can work in various sectors, such as banking, asset management, hedge funds, private equity, venture capital, and more. |
| What are the Qualifications Required to Get into Investment Management? | Investment management requires a combination of academic qualifications, professional certifications, and practical skills. Some of the common qualifications are a bachelor’s or master’s degree in finance, economics, accounting, or related fields, a Chartered Financial Analyst (CFA) credential, and proficiency in financial modeling, analysis, and software. |
| How to Get into Investment Management? | There are different paths to get into investment management, depending on your level of education and experience. Some of the common steps are: – Completing an internship or a graduate program in a reputable financial institution – Networking with industry professionals and mentors – Applying for entry-level or junior positions in investment management firms – Continuing your education and obtaining relevant certifications – Seeking career advancement and specialization opportunities |
| What are the Career Prospects in Investment Management? | Investment management is a dynamic and competitive field that offers various career opportunities and growth potential. Some of the common roles in investment management are: – Portfolio manager: responsible for managing a portfolio of securities and assets according to the investment strategy and objectives – Research analyst: responsible for conducting research and analysis on various securities, markets, and industries – Trader: responsible for executing trades and transactions on behalf of the portfolio manager or the clients – Financial advisor: responsible for providing financial advice and guidance to individual or institutional clients – Investment consultant: responsible for providing investment consulting services to institutional clients, such as pension funds, endowments, and foundations |
What is Investment Management?
The Definition of Investment Management
Investment management is the professional management of various securities and assets, such as stocks, bonds, real estate, and commodities, to meet specified investment objectives for the benefit of the investors. Investors can be individuals, who invest their personal savings or retirement funds, or institutions, such as corporations, banks, insurance companies, pension funds, endowments, and foundations, who invest their capital or assets.
Investment management involves a range of activities, such as:
- Researching and analyzing various securities and markets
- Developing and implementing investment strategies and policies
- Selecting and allocating assets and securities
- Monitoring and evaluating the performance and risk of the portfolio
- Rebalancing and adjusting the portfolio according to the changing market conditions and investor needs
The Types of Investment Management
Investment management can be classified into two main types: active and passive.
Active investment management is a type of investment management that aims to outperform a specific benchmark or market index, such as the S&P 500 or the MSCI World, by actively selecting and trading securities based on various criteria, such as fundamental analysis, technical analysis, market trends, or economic indicators. Active investment management requires more research, skill, and resources, and typically charges higher fees than passive investment management.
Passive investment management is a type of investment management that aims to match or replicate the performance of a specific benchmark or market index, by passively holding or tracking the same securities or a representative sample of the securities in the index. Passive investment management requires less research, skill, and resources, and typically charges lower fees than active investment management.
Both types of investment management have their advantages and disadvantages, and investors should choose the type that suits their investment objectives, risk tolerance, time horizon, and cost preferences. For example, some investors may prefer active investment management for their short-term or speculative goals, while others may prefer passive investment management for their long-term or diversified goals.</p
What is Investment Management?
Why Choose Investment Management as a Career?
The Benefits of Investment Management as a Career
Investment management is a rewarding career that offers many benefits, such as:
- Intellectual challenge: Investment management is a dynamic and complex field that requires constant learning and analysis of various securities, markets, and industries. Investment managers need to have a keen interest and curiosity in the financial world and be able to apply their knowledge and skills to solve problems and make decisions.
- Financial compensation: Investment management is a lucrative career that pays well above the average salary. According to the U.S. Bureau of Labor Statistics, the median annual wage for financial analysts, who are one of the common roles in investment management, was $83,660 in 2020. The top 10% earned more than $159,560. Moreover, investment managers can also earn bonuses, commissions, or profit-sharing based on their performance and results.
- Social impact: Investment management is a career that can have a positive social impact by helping individuals and institutions achieve their financial goals and improve their well-being. Investment managers can also contribute to the economic growth and development of the society by allocating capital and resources efficiently and effectively.
What are the Qualifications Required to Get into Investment Management?
The Academic Qualifications for Investment Management
Investment management requires a strong foundation in finance, economics, accounting, and related fields. Therefore, a bachelor’s or master’s degree in these disciplines is usually the minimum requirement for entry-level positions in investment management. However, some employers may also accept degrees in other fields, such as mathematics, statistics, engineering, or computer science, as long as the candidates have relevant coursework or experience in finance and economics.
A degree in finance, economics, accounting, or related fields can provide the candidates with the essential knowledge and skills for investment management, such as:
- Financial markets and institutions
- Financial analysis and valuation
- Financial modeling and forecasting
- Portfolio theory and management
- Risk management and diversification
- Corporate finance and governance
- Financial accounting and reporting
- Financial regulations and ethics
The Professional Certifications for Investment Management
Besides a degree, investment management also requires professional certifications that demonstrate the candidates’ competence and credibility in the field. One of the most recognized and respected certifications for investment management is the Chartered Financial Analyst (CFA) credential, which is awarded by the CFA Institute, a global association of investment professionals. The CFA credential requires passing three levels of exams that cover topics such as:
- Ethical and professional standards
- Quantitative methods
- Economics
- Financial reporting and analysis
- Corporate finance
- Equity investments
- Fixed income investments
- Derivatives
- Alternative investments
- Portfolio management and wealth planning
The CFA credential is widely regarded as the gold standard for investment management and can enhance the candidates’ career prospects and earning potential. According to the CFA Institute, the average annual salary for CFA charterholders in 2020 was $119,000 in the U.S. and $96,000 globally.
Other professional certifications that can be beneficial for investment management are:
- Certified Financial Planner (CFP): a certification for financial advisors who provide comprehensive financial planning services to clients, such as retirement, estate, tax, and investment planning.
- Financial Risk Manager (FRM): a certification for risk managers who identify and measure the risks associated with various financial instruments and portfolios.
- Chartered Alternative Investment Analyst (CAIA): a certification for investment professionals who specialize in alternative investments, such as hedge funds, private equity, real estate, commodities, and infrastructure.
How to Get into Investment Management?
The Steps to Get into Investment Management
There is no one single path to get into investment management, as different roles and sectors may have different requirements and expectations. However, some of the common steps that can help aspiring investment managers to enter and succeed in the field are:
- Completing an internship or a graduate program in a reputable financial institution: This can provide valuable exposure and experience in the investment management industry, as well as networking and mentoring opportunities. Internships and graduate programs can also lead to full-time job offers or referrals.
- Networking with industry professionals and mentors: This can help to learn more about the industry, the roles, and the skills required, as well as to get advice, feedback, and support. Networking can also help to discover and access hidden job opportunities that may not be advertised publicly.
- Applying for entry-level or junior positions in investment management firms: This can help to gain a foothold in the industry and build a track record of performance and results. Entry-level or junior positions can include roles such as research analyst, financial analyst, investment associate, or trader.
- Continuing your education and obtaining relevant certifications: This can help to enhance your knowledge and skills, as well as to demonstrate your competence and credibility in the field. Continuing education and certifications can also help to advance your career and specialize in your area of interest.
- Seeking career advancement and specialization opportunities: This can help to achieve your career goals and aspirations, as well as to increase your income and impact. Career advancement and specialization opportunities can include roles such as portfolio manager, financial advisor, investment consultant, or fund manager.
What are the Career Prospects in Investment Management?
The Roles and Sectors in Investment Management
Investment management is a dynamic and competitive field that offers various career opportunities and growth potential. Depending on your qualifications, skills, interests, and goals, you can choose from different roles and sectors in investment management, such as:
- Portfolio manager: A portfolio manager is responsible for managing a portfolio of securities and assets according to the investment strategy and objectives. A portfolio manager needs to have strong analytical, decision-making, and communication skills, as well as a deep understanding of the financial markets and the client’s needs. A portfolio manager can work in various sectors, such as banking, asset management, hedge funds, private equity, venture capital, and more.
- Research analyst: A research analyst is responsible for conducting research and analysis on various securities, markets, and industries. A research analyst needs to have strong research, analytical, and writing skills, as well as a keen interest and curiosity in the financial world. A research analyst can work in various sectors, such as banking, asset management, hedge funds, private equity, venture capital, and more.
- Trader: A trader is responsible for executing trades and transactions on behalf of the portfolio manager or the clients. A trader needs to have strong numerical, technical, and risk management skills, as well as a fast and accurate judgment and reaction. A trader can work in various sectors, such as banking, asset management, hedge funds, private equity, venture capital, and more.
- Financial advisor: A financial advisor is responsible for providing financial advice and guidance to individual or institutional clients. A financial advisor needs to have strong interpersonal, communication, and planning skills, as well as a broad knowledge of the financial products and services. A financial advisor can work in various sectors, such as banking, insurance, wealth management, and more.
- Investment consultant: An investment consultant is responsible for providing investment consulting services to institutional clients, such as pension funds, endowments, and foundations. An investment consultant needs to have strong analytical, consulting, and presentation skills, as well as a comprehensive knowledge of the investment management industry and the client’s objectives. An investment consultant can work in various sectors, such as consulting, asset management, and more.
Conclusion
Investment management is a rewarding career that requires a combination of academic qualifications, professional certifications, and practical skills. Investment management offers various career opportunities and growth potential in different roles and sectors, such as portfolio manager, research analyst, trader, financial advisor, and investment consultant. To get into investment management, you need to follow some common steps, such as completing an internship or a graduate program, networking with industry professionals and mentors, applying for entry-level or junior positions, continuing your education and obtaining relevant certifications, and seeking career advancement and specialization opportunities. If you are interested in the financial markets and want to help individuals and institutions achieve their investment goals, then you might want to consider a career in investment management. We hope this article has provided you with a comprehensive guide on how to get into investment management. For more information and advice on investment management and other related topics, please visit our website vninvestment.
