What an active manager does is a common question. An active manager is a type of investment manager who takes an active role in making investment decisions on behalf of their clients. Active managers in Dallas seek to outperform their benchmark index or other investment objectives through a variety of strategies, including picking individual stocks, selecting certain sectors or industries to overweight or underweight, or timing the market.
Clients who ask what an active manager does will be pleased to know the goal of active management in Dallas is to generate higher returns than what would be achieved by simply investing in a passive index fund that tracks the same benchmark. For example, if an investor has a portfolio of $100,000 and the benchmark index return is 10%, the active manager is aiming to earn a return greater than 10%.
The question. “What does an active manager do/” can be answered by several different ways that active managers in Dallas can try to achieve outperformance. Picking individual stocks where active managers will research and select specific stocks that they believe will outperform the broader market. This is often done using a combination of qualitative (e.g. management quality) and quantitative (e.g. valuation ratios) analysis. In addition, selecting certain sectors or industries to overweight or underweight. Active managers may believe that certain sectors or industries are more likely to outperform or underperform the broader market. As such, they will adjust the weightings of these sectors in the portfolio accordingly. Furthermore, Active management in Dallas may attempt to time the market by buying or selling securities based on their assessment of market conditions. For example, they may sell stocks before a market downturn or buy stocks after a market rally.
Active management is a more hands-on approach to investing than passive management, which simply aims to track the performance of a benchmark index. Active management requires more research and analysis, and as such, generally has higher fees than passive management.
Contact Westwood Wealth Management to know about active management in Dallas at their website to get value for your time and money.
