The World of Investment Banking: Trading, Investing or Managing?

For new and experienced investors alike, the best place to start with managing your money and investing it wisely is by asking investment bankers, who are specifically trained and experienced in the investment world. The insight, experience and technical knowledge they can provide will help turn your investment into a profitable one.

What is Investment Banking?

Experience investment bankers will have expertise in a broad range of areas, including investments, stocks, mutual funds, money bonds, hedge funds. They will also be informed about recent macro-trends, changes in the economy and industry developments. You can also expect many investment bankers to be specialized in one area.

Leading financial experts like John Studzinski Weforum will tell you that one of the biggest determinants in how well your stocks will perform is knowing as much about them as possible. This means researching potential start-up companies and corporations before investing, and keeping a close eye on them to monitor growth patterns and change. By keeping up with what’s happening with investments, you will be able to react sooner if you need to sell a stock, or purchase more of it.

Different types of Investment Banking

Investment banking is usually made up of three components: sales and trading, asset management, and the obvious one, investment banking. The services these three components provide as follows:

Investment Banking: this usually refers to corporate and commercial finance, and offers advice and assistance with investment transactions, including using capital to acquire or merge a business, or to sell or divest part or all of a business.

Sales and Trading: if you want to sell a stock, buy a stock, or trade a stock? This area of expertise at your investment bank is where you’ll go for any type of stock management, or simply to check on the happenings in the stock market.

Asset Management: manage existing assets, such as private or commercial property, here. Seek capital for your assets or acquire additional assets here as well.

Tips & Advice on Dealings

When doing business with investment banks, there are some things to keep in mind.

First, know that there are large and small investment banks, with many smaller investment banks making actual investments themselves. But regardless of their size or whether or not they manage stocks, all types of investment banks can assist you with managing your stocks and shares.

Depending on your investment needs, you’ll either work with an analyst or an associate. An analyst will take care of helping you determine what to invest and where, and for businesses, analysts can assist with putting together pitches and models. An associate is a level higher than an analyst, and will help you out with more complex financial transactions, such as business mergers or acquisitions.

All investment banks have vice presidents, a senior vice president, and a managing director, but unless you are an extremely valuable client, you will rarely have interaction with these "higher ups".

Lastly, make sure that you understand the terms & conditions BEFORE you sign a deal. And if they are too complex, too wrapped up in legalese, you will need help to determine the veracity of the contracts. Don’t be afraid of doing this, after all you should…

Trust But Verify

After the financial crisis of 2007-8, you may have read that investment banks may have engaged in trading against their clients, that investment banks sold inappropriate products, or otherwise acted against their clients’ best interests.

The only suggestion that I can make is that you should keep up to date with your investments and not be afraid of querying, checking, double-checking and otherwise managing the investment managers to make sure they are doing their job. While it might be difficult to avoid second guessing the professionals, and you don’t want to micromanage them (that’s not what you’re paying for), you must still be in charge of your money. After all, whose money is it? It’s not theirs.

Investment banking is something you’ll want to look into if you’re concerned about being able to support yourself after retirement, about managing your estate & wealth, or developing your business investing.