Professional money management requires a significant amount of training, and professionals in this field are able to interpret complex market and economic dynamics. To be successful in any type of professional money management, which could include traditional or non-traditional styles, an individual may need to experience various market cycles to learn how to respond appropriately. It would serve a money manager well to surround himself or herself with resources or access to materials that help to dictate money management decisions. Becoming an expert in a given strategy or asset class, which is an investment category, can also lead to greater success in a career.
A money manager typically relies on the support of analytical research or collaboration with colleagues to identify opportunities. Ultimately, money managers are responsible for earning profits for clients and for the firm, or employer. This responsibility is likely to require some support to be handled properly. Many financial firms have research divisions providing reports on individual investment securities, sectors, or regions for investing. Professional money management involves interpretation of the information provided in these reports, which often contain forecasts and opinions on investments, to determine the suitability of an investment opportunity.
Gaining experience is among the best advice for individuals pursuing professional money management. This can begin early in a career when a portfolio manager is part of a larger team. Many financial experts are willing to train and prepare newcomers to money management to excel, and taking advantage of any such opportunities would benefit an industry participant.
There are different types of money management that a professional can pursue. Traditional money management includes the oversight of mutual funds, investment vehicles that contain the investment capital of multiple investors. Hedge funds are an alternative type of investment fund and these money managers trade securities on behalf of investors. To be successful in either category, professional money management requires some element of risk taking. This is often the only way to obtain the types of returns, or profits, that clients are expecting and professional money managers should be able to discern appropriate risk.
Money management is a competitive field. Investment funds are often competing for the investment capital of the same clients. Those who are most successful at professional money management typically focus on creating a track record of historical performance and keeping fees comparable to the rest of the industry.