The Value of Portfolio Management for Businesses

by NXR² Risk Management

Introduction

If you're reading this, you already know the importance of building a sound investing strategy for your business. You know that profits are only as good as they're working for you to yield your company even more money.

However, it can be hard to do it all on your own. With so many options to choose from, you have that many chances of failing and putting your business' future in jeopardy.

In this presentation, we will tell you exactly why portfolio management could very

well be the solution you were looking for.

Types of Management

Simply put, when you hire a portfolio manager, you're giving him the task to manage your investments in order to maximize your returns and minimize the risk.

There exist several types of management that will mainly differ on the degree of

freedom you leave to the manager :

Types of Management

Passive Management : here, the manager's degree of involvment is rather low. He just keeps a fixed portfolio in line with the market

Active Management : here, the manager's degree of involvment is higher as he buys and sells with insistence, to ensure the most profits

Discretionary Management : in this setup, the manager has carte blanche. You give him the money and he will take care of everything

Non-Discretionary Management : contrary to the previous category, in this type of management, no action can be taken without your consent. The manager's role is restricted to that of an advisor

Time Factor

Now that we've taken a closer look at what

portfolio management is all about, let's see

what makes this option such a great

solution for business owners.

First of all, hiring a portfolio manager will free up your time to allow you to do what you do best: running your company. You can't take on an indefinite number of tasks and still be effective at them. You have to choose wisely. As the saying

goes, every man to his own trade.

Risk Factor

Another pro in favor of portfolio management is that it greatly limits the risk inherent to any investing strategy.

For one, by spreading the risk over several products or stocks, your manager will ensure that – should any disaster hit one of them – the others will act as a cushion to absorb the blow and limit the damage. At the same time, a balanced portfolio will almost always make for a healthier and more realistic plan in the long run.

ROI Factor

By staying on top of trends, your manager keeps your portfolio updated at all times, ensuring maximum profit and an increase of your return on investment (or ROI).

However, this factor will greatly depend on the leeway you allow him. As a business owner, you will gain from spending your time at first finding a great and knowledgeable manager, rather than hurrying your choice and spending that time later on checking on every bit of advice he gives you because you just don’t trust him.

Long Term Vision

Last but not least, hiring a portfolio manager will allow you to think months if not years ahead. In short, to plan for the future. A manager, through his knowledge and experience, will help you determine your financial goals, and then he will devise a plan to ensure you reach them and guarantee the longevity of your business.

By being totally dedicated to that cause, your manager will be able to implement strategies well beyond what you could do on your own with your limited time and knowledge of the field.

Conclusion

If you’re working hard to run your business and make it a success, it’s not to have your profits sleep in a bank account with such a low interest rate that it makes you lose money over time!

No, if you’re working hard for your money, you

can expect the same the other way around…

and that’s what portfolio management can bring

to your company.

For more information about how portfolio management could help your business grow:

http://www.r2-financial.com/nxr2/