Asset Management

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Community Submission - Author: Allister Davis

Asset management refers to any kind of method or system that helps individuals or companies manage their assets. These assets may be represented by both physical goods (like a house, an apartment, or a car) or non-physical ones (like copyrights, patents, cryptocurrencies or other digital assets). 

Asset management strategies may come up in various forms, across different areas:

  • Financial Asset Management - investment funds;
  • Enterprise Asset Management - fixed assets for an organization;
  • Infrastructure Asset Management - public infrastructures such as roads and bridges;
  • Public Asset Management - schools, parks;
  • IT Asset Management - hardware and software;
  • Digital Asset Management - information collections.

While there are numerous forms of asset management, this article focuses on Financial Asset Management.

The process of asset management is usually led by a professional known as an asset or investment manager. Their goal is to ensure that the assets are being managed and disposed of in the most cost-effective way possible. A good asset manager will take care of other people’s assets in a way that generates profit or, at least, reduces financial risk

Asset management requires a sound knowledge of market activities in order to maximize the value of the assets. An asset manager can be a sole proprietor or a specialized company. Some risk management firms are made up of expert teams that deal with a variety of portfolios and client profiles. The main idea is to provide long-term financial growth benefits at minimal risk.

Typically, clients in the search for asset management specialists consist of wealthy individuals, pension funds, corporations, and governmental entities. For instance, an asset manager may be responsible for researching extensively and selecting the best investment options for their clients. 

The portfolios may include a variety of financial instruments, such as real estate, mutual funds, bonds, equity, derivatives, commodities, stocks, precious metals, and cryptocurrencies.

Depending on the context, asset management strategies may relate to what is known as active management or passive management. Active management refers to the fund managers or brokers that trade actively in financial markets, aiming to profit from both bear and bull markets. In contrast, passive management is an investment strategy that doesn’t involve active exposure.

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