What is the active management?

6 The aim of active management is not only to achieve an average return on investment, but also to exceed these rates. In order to achieve this goal, people who have decided to engage in active management are directly involved in the growth of the portfolio to take over a passive role in this process.

The basis for the use of active management strategy usually includes the compilation of investment, which differs a bit from the most common and popular market shares, bonds and shares. The active manager will look for opportunities that indicate the potential for growth outside the reference index, and take steps to ensure the investment, while it is still relatively unnoticed by a wide range of investors. The market research is the basis for active investment because the approach requires that a good opportunity to be identified in front of most other investors. Together with a great research of nature and the background of a particular opportunity involves active management also the ability to predict potentialTrends on the market and how it will affect the performance of the problem.

The active management process involves knowing when to sell and what to buy. The timing of sales in order to realize the best return on investment is necessary to maximize the amount of funds returned from the investment. The competent active manager will draw both market conditions and trends within the process. At the same time, active management also requires the investor to draw on his personal experience to determine when to hang on the asset a little longer and when to sell it immediately.