The title says it all.
Despite looking at the wikipedia page, I’m still left feeling like I missed something. It seems like investment companies are pointless, but I know little about their actual day-to-day functions.
For example: “enterprise risk management” is listed as one of BlackRock’s specialties; as a working-class layman, this is hard to make any connections to. Is this just funding? Do they perform any duties similar to a bank?
In: 0
Big investors – banks, governments, and other institutions – don’t just want their investment to grow. They often have very specific investment objectives. A pension fund might want its money to grow enough to keep pace with inflation, but not to be too risky because they don’t want to lose money either. Other investors might be much more growth-oriented, and want a much higher rate of return, in exchange for accepting a higher level of risk. Others still might have a specific timeline on their investment, so they’re willing to be a little riskier up front, but more conservative when the end date is approaching.
Investment bankers in the asset management field select a and purchase a portfolio of investments that suits the objectives of the investor and their tolerance for risk, and actively manage that portfolio. That’s where risk management comes in – risk is not something that is always easily quantified, and a good manager needs to be able to assess the risk environment and make sure they’re getting it right.
Latest Answers