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Fund Managers- What do they do-

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Fund Managers- What do they do- Powered By Docstoc
					If you were extremely rich, you'd be able to afford a team of private money managers
- people who would watch the markets daily and seek out investment opportunities for
you. The good news is that you don't need to be rich to access this - it's what fund
managers do.
A managed fund is an investment that consists of a pool of funds from someone else
etc. These funds combine to be in the millions, and are invested by professional fund
managers. Financial Planners are good at being financial planners. We're not fund
managers. Our job is to recommend financial strategies that will help you achieve
your long term goals. It's what we're good at. We choose to outsource the actual
managing of your money to professional fund managers. It's their job and it's what
they're good at.
A good investment company has a team of staff who manage your money. Let's
consider a fund that invests in Australian shares. The fund employs a team of
investment analysts. Each analyst may have a different field of expertise i.e. resource
stocks, telecommunications companies etc. They have access to a wide range of
research on the companies they're looking at. Due to the size of the funds, they're able
to meet with the key staff of the companies and visit their offices. They're able to react
quickly to company announcements and market movements.

Due to the size of the funds, they're often able to obtain some cost reductions. For
example, the stockbroking rates they'd pay will be far less than what the average
investor pays.The fund invests your money across a range of companies. Some share
funds may have a concentrated portfolio of around 20 stocks, others may hold over
100.

A fund manager has a process that removes the emotion. They have defined reasons
for buying (or selling) a share. If the price declines, they'll want to see why and if they
still believe in the company they'll generally see the price decline as an opportunity to
buy more shares at a cheaper price.

				
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posted:2/21/2011
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