Portfolio Manager Career Guide and Counseling

Question: When managed by a competent portfolio manager, what is the average rate of returns? If I begin investing, what is the average rate of returns will I get if I hire a competent portfolio manager to manage my investment? I've heard, long ago, that the average return on investment is around 12%. Is this true? I am a bit confuse because when I look at bankrate.com, the average CD only give out 4.5% for a five year bond. I know stocks are different from CDs but can the difference be that much wide? Anyways, if you do some investing or manage money, how much is the average return when you invest with an 'average risk'? I'm new to all this so please share your insight.

Answer: There is no solid answer for this question. The average rate of return is more around 10"ish" percent on the stock market, depending on your source. However, that's based of an indexing (buying essentially every stock on the market) instead of just buying in certain markets with the risk level that applies to you. CD's are very low risk (and different from bonds as in your question). They are basically riskless (well a little bit, but very very little), but can face "re-investment" risk- that being if you "lock in" a cd rate that is good- but then inflation occurs, you rate is lower, AND if inflation is even higher once your CD reaches maturity, you might be stuck with worse (relative) rates then you had. Anyways, average risk is also relative. First, how much are you investing (by that, what percentage of your total assets. Could you honestly watch your investment go down by 50 percent knowing that if you wait, it will grow by over 100 percent. THAT takes alot of hard liquor sometimes to deal with that :P) Or diversify (always do this really). By that, go some high-risk areas (say small-cap growth stocks (though they are performing poorly right now), then get some large-cap value stocks (mutual funds), then some international, some bonds, a REIT maybe, etc... Talk to a broker about this- or buy a book on asset allocation. Last but not least, the market is extremely high right now. In my honest opinion, it's TOO high. It can't go up anymore. "You can only climb a mountain to the peak, then you must go down". Not that I'm saying some stocks won't go up- they will. But at prices this high, compare how much higher the market can go to how much lower. Stocks scare me now. Ok, last point: passive investing. This might be the best. In general, mutual fund managers CANNOT beat the S&P 500 in the long run (over many years). They might beat it some years, but they just CAN'T beat the index. So, from this point of view: you can buy a Index Fund, say Wilshire 5000 (5000 stocks of the S+P) and get a better return WITHOUT paying the sometimes high mutual fund fees. I'd seriously look at this option. Feel free to email me if you want- though to be honest, I'm just a senior in college in finance- but I have a decent basic knowledge. I am going to start my broker's license training in about 6 months. Gsfret@eagle.fgcu.edu

Question: portfolio manager? which is the brokerage house in india that provides best portfolio management service

Answer: Try 'Matthews India fund' I don't know what they charge. http://www.matthewsfunds.com/the_funds/india/managers.cfm

Question: If you're looking at the performance of a money manager portfolio, what would be an abnormally high alpha? I understand the general formula for alpha, which is the return minus what the CAPM predicts. I'm looking at an aggressive growth model from a brochure and it shows an alpha of 6.5. This is the first one I'm looking at, but I was kind of expecting it to be in the 1 to 2 range. Does 6.5 sound typical for a money manager portfolio?

Answer: Alpha is a good indicator of historic return adjusted for risk level. So if the manager is simply taking on more risk to achieve a higher return it will show up in the alpha. An alpha greater than zero means that you beat the market on a risk adjusted basis. Asking what a good alpha is like asking what a good PE ratio is. It must be taken in context. A PE of 15 may be great for a small growth company but not so great for a large vale company. It will depend on the type of investments the manager is making. In areas like large cap it is difficult for a manager to have an alpha of 6.5, but in the small cap area it is not uncommon. To get an idea of how a manager looks compare them to mutual funds that invest in the same category. Go to morningstar.com and find a comparable mutual fund and look in the risk measures category. It will give you two alpha one for the standard index and one for the best fix. Remember that past performance is no guarantee of future results.

Question: Requirement and Route to becoming an investment banker / portfolio manager.? How can i be a investment banker / portfolio manager? What are the requirements? Im currently taking up the course of prof.accountancy ACCA body, i wonder if that is enough to enter into a training program or must i go for CFA as well? Advise needed.

Answer: A degree isn't a necessity, though if you want to obtain a decent position you will need a MBA at the very least and an MS in Finance at the most. The CFA actually carries a lot of weight. You need to be in the Finance Industry for at least three years before you can obtain this certificate, regardless of if you passed all three exams. Since you are trading securities you will absolutely need a Series 7 & 66. The Series 6 is a joke since you are restricted solely to mutual funds and nothing else. The 7 is ALWAYS the way to go. Avoid any job that requires the Series 6 because you are limiting yourself immensely!! You would be better served starting out at the bottom of the totem pole by applying as a Financial Advisor. It will get your foot in the door and get the exams you need...plus it will get you in the finance industry to work toward the CFA. I would look into Keir Education for the Series 7, 66 and CFA preparation. They have online correspondence courses that really helped!! Unfortunately, they only have the educational resources for the first exam on the CFA, but from what they told me, they are adding more in the future. Good luck. I hope this helped! -------- Quick point about the Series 63. The Series 66 is a combination of the Series 63 & the Series 65. I would recommend you look for a position that wants you to obtain the Series 66 because this means you will be able to be registered in EVERY state. Not all states accept just the 63, which is where the 65 came in. So, to save money you just take the 66.

Question: What does a Portfolio Manager do? I am under the impression that Portfolio Managers spend the majority of their day in front of computers managing their portfolio investments, mitigating risks, and communicating with their research team. But when I read job descriptions, Portfolio Managers also do a lot of travel to meet clients, sale pitches, they interact with marketing, etc....It almost seems like a Sales job rather than a job where you sit in front of the computer managing a portfolio... Am I wrong?

Answer: It's a pretty broad job description, different at banks vs hedge fund, vs asset management, etc., and different still for fundamental vs technical analysis. http://stockcharts.com/school/doku.php?id=chart_school:overview:fundamental_analysis Definition of portfolio mgr: The person or persons responsible for investing a mutual, exchange-traded or closed-end fund's assets, implementing its investment strategy and managing the day-to-day portfolio trading. The portfolio manager is one of the most important factors to consider when looking at fund investing. Portfolio management can be active or passive (index tracking). Historical performance records indicate that only a minority of active fund managers beat the market indexes.

Question: How many hours a week does a portfolio manager or assistant manager work? I'm interested in pursuing a career as an equity analyst, but don't want to end up in a job down the road where I am working 80-90 hours per week. I'm willing to work for my money, but I would also want to enjoy my money.

Answer: avergae would be 50-60 probably. it really depends on who you ae working for and what kind of client base you have

Question: How would I go about becoming a portfolio manager? I am a Junior at UC Berkeley (Econ. Major) and have been working for a financial planner for two years.

Answer: Get either a Master of Science degree in Finance or a CFA designation (Chartered Financial Analyst) if you really want to be successful in the portfolio management world. Start looking for entry-level stock analyst or portfolio management positions at investment organizations.

Question: how much does an equity portfolio manager make? I am thinking it is all based on performance and the amount of gross fees the fund pulls in. So say you manage about 1 billion and have performance 300 bps over benchmark?

Answer: http://www.indeed.com/salary?q1=equity+portfolio+manager&l1=&tm=1

Question: How do you know if a portfolio manager is a bottom up or top down picker? How do you know where he was strongest, weakest, and how would you know to reccomend him/her. I have done the attribution analysis and worked out sector contribution and stock selection etc. but im not sure about the questions above....anyone know how to answer these Q's

Answer: Look at the portfolio holdings as well as the largest recent buys and sells in their portfolio. See what the objective of the fund is, the turnover ratio, yield, avearge P/E of the stocks in the portfolio, the market cap. volitilty and how long they have been managing the portfolio; also look at the cash % position and how the portfolio has done over the last five years or so as far as returns.

Question: What does a Capital Portfolio Manager do? In general. What experience would you need? Is this a fun job? I know of a 23 year old guy that does this in real estate. He seems to like it. He's also a Ivy grd.

Answer: You try to get rich clients to place their money with you and you interpret market data in depth and must know what actions to take to provide them with the best return on their investment. Knowledge of current market conditions and the ability to react to changes is critical. Choosing the right market sector (established market or emerging market?) and style is crucial. In every market cycle there are certain industry sectors (financial services, energy, healthcare, etc.) that outperform. You have to analyze all sectors and styles, including international and emerging markets, to uncover attractive opportunities for your clients. You have to do all this while reducing unnecessary risks to your clients. Throughout the year, you have to maintain a high level of communication with your clients through personal visits, telephone calls, timely reports and personal letters. During client meetings, you review portfolio performance, discuss the economic and investment outlook and plan tax strategies. In addition, you re-examine your client's overall investment objectives as some goals are met and others come into focus. Furthermore, you have to send your clients a detailed investment review quarterly. This review includes the cost basis of all securities, the current market value, projected annual income, yields, capital changes, a purchase and sale report, and investment performance results measured on a total return basis. Is this a fun job? You tell me. I know I couldn't do it.

Question: How much on average does an assistant portfolio manager make?

Answer: I love the web, you can find just about anything there

Question: What is correlation? Why is it important to a portfolio manager? Please advise, will choose best answer.

Answer: Correlation between two variables is a standardized measure of the covariance. Covariance is an absolute measure of how two variables move together over time. The variance (a measure of risk) of a portfolio depends not only on the variances of the individual assets in the portfolio, but also on the covariance between all pairs of assets in the portfolio. It can be shown that in a portfolio with a large number of assets the variance of the portfolio reduces to the sum of weighted covariances. So, the impact of adding a new security to a portfolio depends primarily on the covariance of this security with all the other assets. Thus, from a portfolio manager's perspective, the relevant measure of risk of an asset or security is its covariance with the market portfolio.

Question: I want to do trading as a portfolio manager...? I want to become a portfolio manager..do fixed income or equity trading..besides getting a CFA, what else would i need? Series 7? Series 63?....or both 7 and 63? Thanks

Answer: Yes, it wouldn't hurt to get some broker experience (I think you need to have an investment firm sponsor your Series 7 & 63). Don't worry, the Series 7 & 63 are a CAKE WALK compared to the CFA exams. I wouldn't worry about the CFP - that's more if you want to be a financial advisor, not a portfolio manager. The CFP gets into things like insurance and estate planning for individuals. I had my 7 & 63, and I changed career paths after passing CFA Level I and failing Level II. The exams are in June - take a class (for each level), and start studying NO LATER than December. I don't want to scare you, but you seriously don't have a prayer of passing if you're not willing to study hard. I'm living proof that even studying hard doesn't always work. I have a good friend who took 5 years to pass all three exams, and he's a very smart guy who works in the industry. I wish you the best of luck!

Question: what is means of portfolio management? & how to become a portfolio manager?

Answer: Portfolio management, this term is used in the stock market investment, for example, you go to stock market and buy 100 share of McDonalds, 100 share of Microsoft, and 100 share of city bank, this is called portfolio. The person, who is tacking care of your stock investment, selling and buying shares, is called portfolio manager.

Question: Where can i get freeware share (intraday) investment software or portfolio manager?

Answer: you can register on http://www.moneycontrol.com for your Portfolio management

Question: Define "risk management" and "asset management" in the point of veiw of portfolio manager? Risk and asset management: the key concepts, and other relevant factors to consider. Major job functions of Portfolio Managers.

Answer: Risk Management The process of identification, analysis and either acceptance or mitigation of uncertainty in investment decision-making. Essentially, risk management occurs anytime an investor or fund manager analyzes and attempts to quantify the potential for losses in an investment and then takes the appropriate action (or inaction) given their investment objectives and risk tolerance. asset management Asset management is the method that a company uses to track fixed assets, for example factory equipment, desks and chairs, computers, even buildings. Although the exact details of the task varies widely from company to company, asset management often includes tracking the physical location of assets, managing demand for scarce resources, and accounting tasks such as amortization.