Investment Management Firms in Minnesota Key Terms

Learn the lingo to work with investment management firms in Minnesota
By Trisha Schulz Got money to invest but don't know what to do next? Your first step may be to hire an investment management firm in Minnesota. An investment management firm can help you with a variety of your investment strategies and is skilled in selecting and monitoring your investments to match your objectives. It may be helpful to educate yourself on the basics of investing. Learning the following key terms may help in building a relationship with your money manager so you can better communicate your goals.
 

Wealth management

Wealth management is also called portfolio management or money management. All of the terms mean the same thing. Portfolio management is the process that investment management firms in Minnesota use to manage an investment strategy, allocating funds when needed and monitoring specific investments.
Try: Read more about wealth management services as offered by Minnesota firm Cornerstone Wealth Advisors.

Hedge funds

A hedge fund is an investment option that uses aggressive strategies unavailable with other investments and is not governed by the same rules and regulations of mutual funds. However, each fund is limited to 100 investors, requiring a sizable investment by each member. Those managing hedge funds in Minnesota bank a percentage of the profits.
Try: Check out this informative Minnesota Law & Politics article regarding alternative investments, including hedge funds.

Mutual funds

A mutual fund is operated by an investment company and gains money from shareholders investing with the same set of objectives. The value of public shares rise and fall. When a Minnesota shareholder buys in to a mutual fund, he or she also gains an equity position in the fund and all of its underlying securities.
Try: The Minnesota Municipal Income mutual fund at Fidelity Investments offers a growth chart and its performance numbers to review.

Annuity

An annuity acts like a contract, sold by an insurance company, providing regular payments to the account holder. Earnings on annuities are tax deferred and the holder only pays taxes on distributions when it is withdrawn. Those fixed annuities offer a payment guarantee of a certain amount, while variable annuities are not guaranteed, but can yield higher returns. Both variable and fixed annuities are considered low-risk, conservative investments by Minnesota investment management firms.
Try: The Minnesota Attorney General's Office provides tips for deferred annuities.

Bonds

If you purchase a bond, you are essentially loaning money to the issuer, whether it is a government or corporation. In return, the issuer agrees to pay you interest on that loan and repay you the value of the bond after a specified period of time. Types of bonds include foreign government bonds, municipal bonds, U.S. government securities, corporate bonds and federal agency securities.
Try: Get the latest information on state-issued bonds from the Minnesota Office of Management & Budget.

Endowment

An endowment is a special category given to charitable giving. An endowment acts as a permanent fund given to a specific person or entity for a specific purpose. Endowments in Minnesota are commonly given to institutions like schools or hospitals.
Try: Find out more about endowments through the Minnesota Orchestra's endowment program.