Editing Finance (section)

===Investment management===
[[File:Stock Price Listing Numbers on a Korean Newspaper.jpg|thumb|[[Share price]]s listed in a Korean newspaper]]
[[File:Stock_ticker.jpg|thumb|"The excitement before the bubble burst"—viewing prices via [[ticker tape]], shortly before the [[Wall Street crash of 1929]]]]
[[File:E-ticker.jpg|thumb|A modern price-ticker. This infrastructure underpins contemporary exchanges, evidencing prices and related ticker symbols. The ticker symbol is represented by a unique set of characters used to identify the subject of the financial transaction.]]
{{main|Investment management}}
{{see also|Active management|Passive management}}
Investment management<ref name = "Drake_Fabozzi"/> is the professional asset management of various securities—typically shares and bonds, but also other assets, such as real estate, commodities and [[alternative investment]]s—in order to meet specified investment goals for the benefit of investors.

As above, investors may be institutions, such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contracts or, more commonly, via collective investment schemes like mutual funds, [[exchange-traded funds]], or [[real estate investment trust]]s.

At the heart of investment management<ref name = "Drake_Fabozzi"/> is [[asset allocation]]—[[Diversification (finance)|diversifying the exposure]] among these [[asset classes]], and among individual securities within each asset class—as appropriate to the client's [[investment policy]], in turn, a function of risk profile, investment goals, and investment horizon (see [[Investor profile]]). Here:
* [[Portfolio optimization]] is the process of selecting the best portfolio given the client's objectives and constraints.
* [[Fundamental analysis]] is the approach typically applied in [[valuation (finance)|valuing]] and evaluating the individual securities.
* [[Technical analysis]] is about forecasting future asset prices with past data.<ref>{{Cite journal |last1=Han |first1=Yufeng |last2=Liu |first2=Yang |last3=Zhou |first3=Guofu |last4=Zhu |first4=Yingzi |date=2021-05-21 |title=Technical Analysis in the Stock Market: A Review |url=https://papers.ssrn.com/abstract=3850494 |language=en |location=Rochester, NY|doi=10.2139/ssrn.3850494 |ssrn=3850494 |s2cid=235195430 |website=SSRN Papers}}</ref>

Overlaid is the portfolio manager's [[investment style]]—broadly, [[Active management|active]] vs [[passive management|passive]], [[value investing|value]] vs [[growth investing|growth]], and [[Small cap company|small cap]] vs. [[large cap]]—and [[investment strategy]].

In a well-diversified portfolio, achieved [[investment performance]] will, in general, largely be a function of the asset mix selected, while the individual securities are less impactful. The specific approach or philosophy will also be significant, depending on the extent to which it is complementary with the [[Stock market cycles|market cycle]].

Additional to this [[diversification (finance)|diversification]], the fundamental risk mitigant employed, [[Financial risk management#Investment management|investment managers will apply]] various hedging techniques as appropriate,<ref name = "Drake_Fabozzi"/> these may relate to the [[Portfolio insurance|portfolio as a whole]] or [[Hedge (finance)#Hedging a stock price|to individual stocks]]. [[Bond fund|Bond portfolios]] are often (instead) managed via [[cashflow matching|cash flow matching]] or [[immunization (finance)|immunization]], while for derivative portfolios and positions, traders use [[Greeks (finance)#Use of the Greeks|"the Greeks"]] to measure and then offset sensitivities. In parallel, managers – [[active management|active]] and [[Passive management|passive]] – [[Performance attribution|will monitor]] [[tracking error]], thereby minimizing and preempting any underperformance [[Investment management#Risk-adjusted performance measurement|vs their "benchmark"]].

A [[quantitative fund]] is managed using [[Quantitative fund#Investment process|computer-based mathematical techniques]] (increasingly, [[machine learning]]) instead of human judgment. The actual trading [[automated trading system|is typically automated]] via [[algorithmic trading|sophisticated algorithms]].