What is the primary focus of investment management?

The focus of investment management is fundamentally about optimizing the balance between risk and return. Investment managers analyze various investment opportunities and develop strategies that seek to achieve the highest possible returns while mitigating potential risks. This dual emphasis is crucial because investors must recognize that higher returns typically come with increased risk. Therefore, a well-structured investment strategy aims to align an investor's risk tolerance with their return goals, ensuring that investments are managed efficiently to meet financial objectives.

While forecasting market crashes, saving for retirement, and understanding market psychology can be components of an investor's overall strategy or knowledge base, they do not encapsulate the core aim of investment management. The essence of this field is concentrated on creating and overseeing a portfolio of investments to maximize gains pursuant to a set level of risk, making minimizing risks while maximizing returns the primary focus.