The key to making the most of investment management firms in Washington DC is understanding the primary goal of these companies. Investment managers seek to maximize their client's investments and minimize their risks. These goals are not always complementary and a good investment manager will try to balance return against risk according to the needs of their client.
There are many different types of clients for investment firms in DC. For example, mutual fund managers invest money for individual retail clients while managers at investment banks serve companies or municipalities. There are three basic types of investment managers based on the types of funds they handle:
- Investment firms in Washington DC may invest mutual funds for individual investors. These clients usually do not have a high net worth individually although the total fund can be extremely large.
- Capital management firms also manage endowments, foundations and pensions for non-profit organizations. These investments use a more conservative strategy than mutual funds.
- Hedge funds are another type of fund frequently managed by investment firms. Washington DC hedge funds typically invest in public securities and may use a wide variety of strategies.
Select Washington DC investment firms that look at long term resultsMinimization of risk is the primary goal of these investment management firms. Washington DC investment managers of long term funds look for undervalued stocks with a high earnings potential.
Locate firms that perform investment management in Washington DC for affluent clientsWealthy investors frequently require unique investment management plans. The investment management firm should work closely with the client's financial advisers to increase the client's wealth over the long term.
Create a diversified portfolio with Washington DC investment firmsDiversification is an investment strategy that manages risk by mixing a variety of investments. The fluctuations of a single security therefore have less impact on the portfolio.
- Fund performance is the gold standard by which analysts measure investment management. Washington DC financial analysts use standard indices and peer groups over the same time period to compare the performance of different types of asset management. Washington DC investment firms should assess fund performance over a long period, usually at least three years. This time frame will minimize the effect of short term fluctuations and the business cycle.