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Learn to Invest

How Can I Become A Portfolio Manager?

By Louis H-P on January 10, 2021

Reading Time: 3 minutes

Any novice investor who learns the job of a portfolio manager, will see a difference in their investment performance. More than any front office job, a portfolio manager actually knows what they are investing in. This means that over the long-term, they are able to outperform investors who have not researched their investments. Critically this is achieved by taking less risk. 

Key Takeaways

How do portfolio managers approach their work

Why reading the annual report will give you an advantage

Find out which qualifications will benefit you

What is a portfolio manager?

A portfolio manager is some someone who manages a portfolio of investments. In this article we will focus on listed investments. A PM will research and perform fundamental analysis before deciding which companies to buy and hold. They are focused on share prices going up. A hedge fund manager will invest in the hope of a share price going down. 

They are investment encyclopedias

The portfolio manager will have a great deal of general business knowledge, as well as a detailed financial acumen. They want to know everything, and do, about long-term investments. Typically, a PM is the most well informed front office employee on a company’s prospects.

PM’s like reading… a lot

To gain the kind of encyclopedic knowledge required, you will have to read widely about industry sectors. It is not enough understanding a company you are investing in. You also need to understand what it’s competitors are doing and whether that particular sector is growing.

A great place to start is the annual report of a company. Within the various sections will be a strategy section, a report of current progress and the all-important financial statements. Incredibly many investors never read the annual report of companies they own!

Although a novice investor cannot be expected to understand detailed financial statements, you can work out if the company is making cash. You will also be able to work out if it its profits are growing and how big its debts are.

Curiosity leads to knowledge.

The strategy section will help you understand what is driving the company forward, as well as potential (growth) opportunities. You can also go back on years gone by, to see what management has said before and how good they are at executing it.

No one size fits all

There is no one method which you can copy, but different approaches and styles. The value approach of investing, favored by Warren Buffet has been out of favor for some time in favor of growth.

Some managers will also approach their investments from completely different directions. A top-down approach will entail looking at macro-economics first and then investing in areas which are growing.

In a bottom up approach, a manager will seek to identify companies which are growing, without necessarily focusing on the wider economic situation. In practice most managers dovetail between the two, so can you!

Gain a ‘feel’ for a company…

High profile portfolio managers often meet management companiesInvesting is not simple. You have identified a growing company by analysing its accounts but will this growth continue? The data can only help you so much. At times you have to gain a ‘feel’ for a company. This is achieved by understanding how management make decisions. Meeting management is reserved for major shareholders or high profile portfolio managers, but you can listen in to a trading update.

Investing is an art, not a science.

The investor relations section of a company’s website will list when the next audio feed is. In this way, you can identify an opportunity that the market has not priced in.

Education opens doors to knowledge

Being prepared to take some time out of your day to study will pay dividends. Taking some qualifications from the likes of The Chartered Institute for Securities & Investment will increase your understanding and give you more confidence.

Having the confidence to be a contrarian investor can be rewarding, but only if you have researched and understood the risk you are taking. Taking examinations in the Wealth Management section, a bastion for portfolio managers, will help you balance risk versus reward.


Fundamentally as a portfolio manager you are trying to identify companies where no-one else has realised the potential. Finding disruptive companies who are going to change the way we work today is easy, but will they all succeed in making money? That is your job to work out!

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Louis H-P

Louis is a portfolio manager and a trader who brings a wealth of experience in private banking to The Lazy Trader. A fundamentalist and a trouble-shooter, Louis makes a firm contribution to the trading team.

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About author

Louis H-P

Louis is a portfolio manager and a trader who brings a wealth of experience in private banking to The Lazy Trader. A fundamentalist and a trouble-shooter, Louis makes a firm contribution to the trading team.

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