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Money and Portfolio Management Careers, Jobs, and Training

Do you catch yourself reading between the lines when you look at a spreadsheet? Do you follow market trends and stock prices like some people follow football teams? If you do, then perhaps you ought to look into life as a money management professional. Money managers work on the purchasing end of Wall Street deals and act as custodians for the investments of institutional customers. While there are money managers who rely on complex technical analysis, there are plenty who succeed on little more than intuition.

Money managers all have their special way of doing things; whatever your method, the important thing is to be open-minded, well disciplined, and objective about investments. Lots of Money Managers purchase and carry corporate bonds, agency securities, asset-backed securities and other fixed-income investment products. Some specialize in small stocks, large cap funds, fledgling markets, and other equities.

Regrettably, money management is not an easy business to get into, especially if you’re trying to get into leading management firms. Less difficult places to get your foot in the door include insurance companies, government pension funds, and bank trust departments. There are a lot of money managers who began working in sales for investment banking firms. Another popular method for getting into money management is to first get involved in marketing.

If you can prove yourself successful as a money management marketer, you will be infinitely more likely to find a company willing to employ you. To get the ball rolling, start now studying fixed-income investing and investment portfolio theory, get certified as a financial analyst, and make the industry your best friend. With hard work and a nod from lady luck, you will be on your way to a stellar career in money management.

Job Qualifications and Skills

The money management industry is booming and offers a variety of career options. This field deals with the largest markets of any kind in the world and call on the following skills:

  • Level of People skills: Medium
  • Level of Sales skills: Medium
  • Level of Communication skills: Medium
  • Level of Analytical skills: High
  • Level of Ability to synthesize: High
  • Level of Creative ability: Medium
  • Level of Initiative: Medium
  • Level of Work hours: 55-75/week

Job Opportunities for Money Managers

  • Portfolio Manager

    Pension fund or money management firms hire portfolio managers to oversee investing for a group with specific investing aims. More managers currently specialize in hedge or commodity funds. Managers of portfolios have a variety of approaches, from growth stocks to deal finding. Work in this area necessitates discipline, patience and a broad knowledge of companies and markets in the financial sector.

  • Portfolio Management Marketing

    You might be interested in portfolio management marketing if you consider yourself thoughtful and sociable. This entails cooperation with a portfolio manager to compile presentation information for customers. These must be well done requiring a good knowledge of the company and plenty of effort. Experienced professionals are exactly what these companies are looking for. These companies want people who can make authoritative suggestions about their larger investments. This job requires travel but pays very well.

  • Investment Advisory

    The money management sector requires companies who offer advice on investing, evaluation of quantity and analysis of performance. This sector includes a firm like Wilshire Associates based in L.A. that offer individualized analyses for money management firms and others. An understanding of finance and skills in quantity are required for this career.

  • Mutual Fund Analyst

    Before investments are chosen, analysts most often provide analyses to large pension or mutual funds. They might wonder if a specific bond is secure. They also might compare convexity and duration to determine interest rate risk. Analysts who understand computers and programming answer these questions. Because the work is constantly changing and involves a little detective work, the majority of these analysts find their work fulfilling.

  • Hedge Fund Principal/Trader

    Hedge funds are private funds that involve large sums invested in currencies, bonds, stocks and the like. Because of the speed at which hedge funds have developed, firms continue to hire large numbers of analysts and traders.

Industry Facts and Trends

  • Educate Yourself

    Remember it is essential to be well educated in methods of fixed-income evaluation if you are considering a money management career. Bond analysis is a common job so it is essential that you understand valuation of bonds (embedded options especially), yield curve methods, measurements in volatility of bond prices and causes of change in bond prices. There are also other aspects involving the Treasury and various markets backed by different institutions or parties, such as: corporations, municipalities, European, assets, agencies or mortgages.

  • Success is not easy

    Long-term success in this type of career necessitates a blend of essential skills including discipline, hard work, good perceptions and strong intellect. The right mixture of these skills and traits is rare indeed.

  • Difficult to Get Your Foot in the Door

    The ground floor of money management is in commercial banking, insurance, trust departments, and pension funds. However, it is not an easy path.

  • Indexing Becoming More Popular

    Because of lack luster performance from active management, indexing investments has become more and more popular for large pension funds. Indexing means structuring a fund to mirror an equity index like the S&P 500. The support for indexing given by firms like Vanguard, Barclays Global Investors, and TIAA-CREF has lead to rapid market expansion. Lower fees make indexing more enticing than active management of funds.

  • Hedge Funds on the Rise

    Regardless of problems emphasized in the media, hedge funds have a bright future. Hedge funds are volatile private funds backed with large amounts of capital and primarily comprised of bonds, stocks, derivatives and currencies. More than $50 billion is currently tied up in hedge funds, with more than $250 billion connected by leverage.

  • Mutual Funds are Huge

    Mutual funds are specially organized folios of investment products and capital resources controlled by a money manger. There are more than 20 different types of mutual funds, from commodities funds to capital growth funds. Important steps in the mutual fund process include trading, orders, marketing, record keeping, analysis, and customer service.

  • Money Mangers handle lots of Dough!

    There are few businesses larger than money management. Sanford Bernstein and Company reports that money mangers oversee more than $9 trillion in assets.

  • Perform or Perish

    More and more money managers are receiving pay based on the performance of the portfolios they manage. If you do well, you get paid well. But if you do poorly, you get paid poorly.

  • Global trends in Money Management

    International investment is a steadily increasing aspect of money management. In a study of 200 major US pension funds, Pensions and Investments magazine reported that in 1993 global investing grew by more than a quarter.

  • Fierce Competition in Mutual Funds

    More than 6000 mutual funds are currently active in the United States. In addition, no-load funds that eliminate up-front fees are increasing in popularity.

  • In the End, Money Managers Do as Well as the Market

    Over the last decade, almost three quarters of all money managers were unable to out-perform the S&P 500 index when fees were taken into consideration. It appears that the efficient market theory holds true for the most part. Those interested in pursuing a career in money management should understand the challenge it is to establish a reputation and outdo the market.