Investment Banking Information

There are various ways of reducing the risk of investing in equities. The most important is to invest in a portfolio of securities. The value of having a wide portfolio of different securities, instead of concentrating investment on a small number of individual stock or share items, is the reduction in the risk of a poor return. The investor in a portfolio is not putting all his eggs in one basket so that if one share performs badly, it is likely to matter very much because the other stocks and shares in the portfolio might perform well.

Investment management is the total administration of a customer’s portfolio of stocks and shares and unit trust holdings etc. if a bank provides an investment management services, it does so through a separate department or subsidiary company. The service will be provided within the framework of a formal customer agreement. To the banks which offer the service, investment portfolio management is really only profitable for large sums of money invested (perhaps $10,000-$50,000 or more). With smaller sums, the bank might try to persuade the customer to opt for unit trusts, instead of a personal portfolio of investments.