Difference between Investment Management and Trading
Can someone please explain the difference between trading (as in the sales and trading division of a BB) and investment management? I can't understand the difference. Both seem to be trading. Also, what would be better preparation for a career in asset management? Thank you! My question arose after reading about the division on Goldman Sachs' website (securities vs. investment management)
wrong forum but its more like trading = sell side investment management = asset management = buy side (insurrance, pension funds, hedge funds and mutual funds)
If you are asking about securities division then they are not actually trading..they are more like executing trades for their clients..like this lady is telling about her day as to how it is commission based and that she is a broker... http://www2.goldmansachs.com/careers/our-firm/people/Cloris/my-day.html
on the other hand this person is actually a trader http://www2.goldmansachs.com/careers/our-firm/people/Seijiro/my-day.html
So the prop traders at goldman sachs are in investment management?
NuK85...one of them is a sales, the other is a trader, but both is still part of securities S&T. And no prop traders are not investment management. prop trading is part of S&T which is in securities. Prop traders only executes trades using the company's money.
Thanks kbluearmor7 for explaining..So that means that a sales guy is just a broker who is trying execute trades for the client and earn commissions on those..he has no discretion as to what trades are to be executed...??
What is better for transitioning to a hedge fund external of one at a BB? Also, if you are in S&T, it's only good to be in on the trading component of the business, correct?
NuK85: Yes sales is the guy who will pull in the clients to trade with his/her bank and the salesperson will ask the trader of the desk in whatever product the client wants to trade for a quoted price and if that price is good with the client then the trade is executed, and the trader will make the difference in the spread in which the trader sells the stock/swap...etc, and the price in which he/she bought in on his/her own book. Sales people are also supposed to make recommendations to clients on stocks to trade, but it gets complicated as the research people will try to push sales to pitch those to the clients.
Chicago_111: There are lots of positions in a hedge fund. What are specifically looking to get into. Both trading and investment management skills are needed. As to whether the sales side or the trading side is better...I would say it depends on what kind of skill set you have. If you like in interaction with clients and am a savvy speaker, then sales is definitely your thing. If you are more quantitative, like to think on your feet, and can handle tremendous stress and can calculate numbers in your head quickly then trading is better.
It sounds like the sales component of S&T is similar to PWM then, right, since PWM=sales? If that's the case I think I'd prefer PWM to sales in securities, since you can make more in PWM I think. Ultimately I'd like to be a portfolio manager at a hedge fund. Of all these options (PWM, sales, trading, or asset management), which do you think is better to go to a hedge fund and be a PM?
Company Energy X buys Company Y in County XYZ, they own certain assets on pipelines and other resources over the next 3 years. Company X wants to hedge currency exposure as they report in their own home currency.
Company X meets with sales, sales understand the customers needs sets up a plan, relays back to traders what kind of things they can do. Sales speaks with the treasurers from Company X up to date. Etc it is very different than PWM, PWM is you are dealing some rich dude, sales is dealing usually with instuitional clinets which have specific mandates and needs. The best sales people know their product in depth and thier customers, so if i know Company X is looking to purchase another firm in Country XYZ, i can relay with traders how we can make their hedging go down better, or maybe i know Company X will have more exposure in certain months. Etc...
What can you make more money in: IM or trading/prop trading? It sounds like Asset Management is the same as prop trading, minus the fact that you're not using the firm's capital, since a lot of hedge fund managers just trade all day.
Dude...do your research before asking a question. First off investment mangement is a very graod area which includes asset management as you will see the example in GS. And no prop trading does not equal to assetmengement. Prop trading does not manage assets, they do whatever strategy is needed to make money for firm x using firm x's money. As to what gets you the most money....if you perform the best at what you do doesn't matter where you are you will make tons of money whther you are in sales or trading.
Prop trading seems similar though to AM in that both involve trading all day...
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