Asset Management - Deepstash
Asset Management

Asset Management

Asset management is the practice of increasing total wealth over time through acquiring, maintaining, and trading investments that have the potential to grow in value.

However, we must keep in mind that asset management has a double-barreled goal which increases value while mitigating risk (this is usually dependent on the client's tolerance for risk).

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How Asset Management Companies Work

Asset management companies compete to serve the investment needs of high-net-worth individuals and institutions.

Accounts that are held by financial institutions often include check-writing privileges, credit cards, and brokerage services. Another added benefit is that the needs of the account holders from banking needs to investment needs can be met by the same institution.

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Asset Management Company vs Brokerage

Asset Management:

  • Their clients give them discretionary trading authority over their accounts and are legally bound to act in good faith
  • They cater to the wealthy and usually have a higher minimum investment threshold

Brokerage:

  • Brokers require the client's permission before executing a trade 
  • Brokerages are open to any investor and the companies have a legal standard to manage the fund to the best of their ability and in line with their clients' stated goals.

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Asset Management Managers

Asset manaement is a service that is offered by financial institutions that cater to high net-worth individuals, government entities, corporations, and institutional investors such as colleges and pension funds.

Asset managers have fiduciary responsibilities where they make decisions on behalf of their clients in good faith. They determine which investments to pursue or avoid that's within the limits of the client's risk tolerance.

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Investing is a way to set aside money while you are busy with life and have that money work for you so that you can fully reap the rewards of your labor in the future. Investing is a means to a happier ending.

The goal of investing is to put your money to work in one or more types of investment vehicles in the hopes of growing your money over time.

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 Investing defined

Investing is about laying out cash or assets now, in the hope of more cash or assets returning to you tomorrow, or next year, or next decade.

Most of the time, this is best achieved through the acquisition of productive assets.

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Both saving and investing are important, but they are not the same. While both can help you build a more secure financial future, customers must understand the differences and know when to save and when to invest.

Savings are usually placed in low-risk savings account. Those looking to optimize their earnings should aim for a savings account with the highest annual percentage yield (as long as they can meet the minimum balance requirements).

“First and foremost, both include saving money for the future,”

Both savers and investors recognize the value of getting capital set aside.

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