Often times I’m asked as to what I do — as in, for a living. I know we’re supposed to have an “elevator pitch” down that’s short and catchy and leads to business cards being exchanged, meeting up for golf or drinks, and a new client relationship made. How easy! Except that I don’t play golf and try to keep dinner and drinks in check, especially when I have to work those calories off (harder to do as you get older).
But I digress. The point of this article is to distill down what the role of an investment portfolio manager is.
Other than looking to achieve the best returns through my investment acumen, the role that I undertake as an investment counselor in the process of managing portfolios is only a variation on a constant theme: All portfolios share one objective – to provide the largest possible pool of assets from which the owner can finance expenditures now or at some future date. Since the future is uncertain, however, we can never know precisely what the value of the assets will be over time, and we know even less about what their purchasing power will be. The degree of risk that I take should, therefore, varies in each case, based on the time horizon within which I have to work and the likelihood that the portfolio will enjoy cash inflows or will be subject to cash withdrawals. The art of portfolio management consists of nothing more than selecting securities that fit within the time and cash flow constraints of the client: the application of this process to differing portfolios is only a variation on a constant theme.
As simple as that. If you’re going up a high rise, with many floors to pass, then I guess you could construe this as an elevator pitch.
Stay healthy, wealthy and wise (and if you want to continue the conversation, how about a bike ride?)
Eric Linser, CFA