A Short Guide to Portfolio Management Careers

A portfolio is a record of monetary gains and losses. Any asset that can acquire a profit, such as real estate, stocks or other investments, is considered part of a portfolio. Successful portfolios turn a profit, but following the stock market and analyzing risks and returns can be chaotic. Portfolios need to be well-maintained, and this is where portfolio management comes in.

Named one of the “Best Jobs in America” by CNN, portfolio management is a good fit for those with a passion for markets and investment analysis. While the hours can be long and being charged with handling someone else’s money can be stressful, the benefits of the career outweigh the negatives.

What Does Portfolio Management Entail?

Portfolio management is both an art and a science. Portfolio managers make decisions about investments, match investments to objectives, allocate assets for individuals and institutions and balance risk against performance. They synthesize a variety of data and make educated guesses to determine how to manage resources to most benefit the client.

Portfolios can be maintained in several ways, and though the objective of each technique is essentially the same, the role of the manager sometimes differs.

  • Active: Active portfolio managers strive to make better returns than what the market dictates. They buy undervalued stocks and sell them when the value climbs above the norm. This technique involves the quantitative analysis of companies to determine the cost of stock in relation to its potential using ratios. To downsize risk, active managers diversify investments, meaning they allocate money in a way that reduces the exposure to any one asset or risk. Active management relies heavily on skill.
  • Passive: Passive portfolio managers use efficient market hypothesis, which is the theory that the fundamentals of a company will always be reflected in the price of the stock. These managers prefer to focus on index funds which have a low turnover but good long-term worth.
  • Discretionary: Discretionary managers make decisions for the investor. While the individual goals and time-frame are considered, these managers adopt whichever strategy they think best.
  • Non-Discretionary: Non-discretionary managers are financial counselors. They advise investors on financial strategies, but the investor chooses what to invest in.

Education Requirements and Career Outlook

It’s common for portfolio managers to begin their careers as financial analysts working on stocks, bonds or other securities for a firm in the securities industry, which is comprised of organizations involved in the management of tradable financial assets. Junior analyst positions are typically open to bachelor’s degree graduates.

Although a master’s degree is not required for career advancement, a master’s degree greatly improves chances for advancement into senior analyst roles, as well as an increase in salary.

In addition to a degree, many employers require portfolio managers to hold financial analyst certifications. The most prominent certification in the field is chartered financial analyst (CFA), which is open to any financial analyst who has a bachelor’s degree with four years of acceptable work experience and passes a series of three exams. Certified financial planner (CFP) is an optional qualification valued by many employers, as well.

Portfolio managers must also hold an appropriate license from the Financial Industry Regulatory Authority (FINRA). The licensing process generally requires candidates be sponsored by their employers.

According to the Bureau of Labor Statistics (BLS), financial analysts, including portfolio managers, earned a median annual salary of $80,310 per year as of 2015. The BLS projects that employment for this group of workers will increase by 12 percent by 2024.

Careers in Portfolio Management

General Management

  • Provide a client with advice and research that drives an overall investment strategy and meets the client’s goals
  • Meet with experts and clients to gain a better understanding of business strategies
  • Monitor trends and forecasts, analyzes data and determines the likely success of a strategy
  • Track and analyzes economic data to identify patterns and make predictions
  • Oversee a team of researchers and analysts 

Investment Analysis Management

  • Conduct research to determine which investments will grow the client’s portfolio
  • Buy and sell investments such as bonds, shares, and real estate to meet the client’s goals
  • Monitor economic factors
  • Weigh different risks and potential returns in order to determine the best investment decision for the client

Asset Management 

  • Examine a client’s portfolio to ensure that shares and assets are being used responsibly 
  • Determine through research a strategy that will meet the client’s request
  • Develop recommendations for the ways in which the organization’s assets should be managed
  • Monitor specific investment options and financial market segments

Why You Should Choose the MBA Program at Virginia Wesleyan Online

As a student in Virginia Wesleyan’s online MBA program,  you’ll learn about organizational management, applied ethics, economic analysis, supply chain systems and more – helping you get on track to a more rewarding career.

Our online program provides an opportunity for students looking to innovate and grow professionally to receive a top-notch education with flexibility and ease. Under the careful guidance of experienced faculty, you will gain the knowledge you need to pursue multiple career paths in business.