Investment Management Analyst Valuation: A Comprehensive Guide

A job of the investment management analyst is to perform portfolio valuation services to determine it's profits, losses and rate of return. An investment management analyst uses software that is based on pricing theories and assumptions. They establish prices for their portfolios according to the method requirement of the FASB 157 statement, or “mark-to-market” accounting standards.

What is Mark-to-Market?

Mark-to-market (MTM) is a requirement by the Securities and Exchange Commission (SEC) which requires all investment firms to base portfolio and securities valuations on their daily closing value. This includes any margin requirements on a leveraged account that is using borrowing as a way to purchase or transact in securities. MTM is based on the principal that securities values change on a daily basis due to movements in the market and that the price and value of securities holdings should reflect this.

Investment Management software is designed to pull down the necessary data for the investment management analyst to price the portfolio on a MTM. The Financial Accounting Standards Board (FASB) provided guidance in its statement numbered 157 on how these valuations should be conducted by investment firms. This guidance creates a uniform standard for investment valuations and a way to perform a fair comparison between funds.