One of the most coveted careers in the financial industry is that of the portfolio manager. Portfolio managers work with a team of analysts and researchers, and are ultimately responsible for making the final investment decisions for a fund — or asset-management vehicle. While a portfolio manager is a position that a person must work his or her way up to over the course of a career, there are a few initial steps that you can take to help you on your way to being a portfolio manager.

Background of Portfolio Managers

If you are still an undergraduate student who is considering a career as a portfolio manager, it is advisable to take courses in business, economics, accounting and math. Many portfolio managers also have an academic background in computer science, engineering, physics or biology. An MBA degree, in addition to an undergraduate degree, is also a popular among portfolio managers.

A professional designation many portfolio managers also possess is the Chartered Financial Analyst (CFA) charter. In order to achieve this designation, candidates must demonstrate a proficiency in financial and accounting terms and techniques, economics and quantitative analysis. as well as prove the required work experience. (For related reading, see What Does CFA Mean? )

Within a firm, portfolio managers are often promoted from the rank of research analyst. Working as an analyst is a great training ground for becoming a portfolio manager. It provides a framework for making crucial portfolio decisions, such as buying or selling a security, and determining the underlying economic conditions that affect those securities. Even if you have yet to enter a professional environment, you may want to begin by picking and choosing stocks in a mock portfolio club/online simulator. (Trade $100,000 of virtual cash in our Investopedia Simulator .) Such an experience will give you a good idea of what being a portfolio manager is truly like. (To learn more, read Becoming A Financial Analyst .)

Types of Portfolio Manager Positions

There is a wide variety of positions within the realm of portfolio manager. The positions depend on the following criteria:

1. Size of Fund. A portfolio manager may manage assets for a relatively small independent fund or a large asset management institution. A portfolio manager may also manage the capital of a large business such as a bank or an organization that has a large endowment. such as a college or university.

A manager who manages assets for a large money management institution is commonly referred to as a portfolio manager. while someone who manages smaller fund assets is typically called a fund manager. Someone who manages assets for a large business organization or a college is commonly referred to as a chief investment officer (CIO).

A Day in the Life of a Portfolio Manager

Although a day in the life a portfolio manager is diverse, one constant is checking the status of the financial markets and staying on top of current events. A portfolio manager will meet regularly with his or her analysts in order to discuss market developments and the trends of relevant current events. Since a portfolio manager’s day is dictated by the start of the financial markets, they generally tend to be one of the very first employees into the office in the morning. (For more insight, see Short-, Intermediate- And Long-Term Trends .)

A portfolio manager directs all of the trades the fund or portfolio makes during the day by making final decisions on the securities involved. He or she meets with analysts that have conducted research on various securities and the institutions that have issued them. Based on their recommendations, the portfolio manager makes the ultimate decisions of what securities to buy or sell. Some asset management styles, such as growth portfolios or funds. have a higher security turnover than others, such as value management .