The definition of asset management is to select and invest in the best available assets. It is also important that the assets are monitored continuously so that any kind of risk may be avoided.
The procedures of asset management may be categorized. A few of these categories are the selection process of the asset, investing in the asset, making proper assessment of risks and developing proper strategies to save the assets from exposure to risks.
Continuous monitoring of assets is also a necessary part of asset management. There are a number of investment instruments that are regarded as assets. Among these investments are stocks, bonds, gold, silver, real estate and various commodities. It is important to analyze the market situation and development prospects of each one of these assets.
Investment then takes place according to the developmental prospects of the assets. Another important part of asset management is to set goals and time limits. Financial goals are important. Any strategy followed by the investor depends on investment objectives. It should be noted that identifying the proper asset and ensuring good performance of the asset in the long-term is a significant component of the asset management procedure.
Determining the tolerable amount of risk is also done by asset management. Another important factor is diversification of the investment portfolio. This diversification is necessary to ensure proper growth of the portfolio, as well as to protect the portfolio from risks.