What Is The Main Difference Between Investment Banking, Asset Management and Trading???

Question

It all seems so similar to me. Please help me to understand.

Answer 1

Without getting overly technical, let me offer a simple explanation.

1) Investment Banking deals with the issuance of new securities. In other words, they help stocks come to market--IPOs.

2) Asset Management involves the effective use of a company's assets. Assets are held in order to generate revenue and the last thing a company wants is unproductive ones. So asset management looks at which assets to hold onto, purchase, or get rid of.

3) Trading is the buying and selling of securities--stocks, bonds, commodites, etc.

So they're all part of the financial world, but concentrate in different areas within it.

Answer 2

Investment banks are banks that trade with their own money as well as that of their clients.

Asset management business are involved in looking after the assets (cash, stocks, bonds etc) of their clients. They do not invest in their own name.

Trading is the process of dealing in stocks and shares.

Answer 3

Asset Management = Longish term outlook to managing other people's money.

Investment Banking = very wide area, to include advising and aiding companies transactions, divvying out result of companies' capital raising to the market, structuring etc.

Trading = can be part of either of the above and is the conduit between them.

Answer 4

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Answer 5

The product, and the labor which produces. Understanding the flow level for each.