This research will begin with the statement that investment refers to the current commitment of dollars for a period of time so as to derive future payments that will compensate the investor for-
The period for which the funds have been committed
The expected rate of inflation during this period of time
Compensation for the risk associated with the investment, i.e. the uncertainty of future payments
The process of selection of investment categories requires analyzing, estimating and evaluating the expected risk return trade-off for the alternative investments available. Investment needs and Financial Plan differs from individual to individual, and changes with respect to the life cycle of the individual. After the investment decision is undertaken by the individual, the major function is to manage the investment portfolio evaluating the performance of the portfolio and updating the portfolio based on the changes in the economic environment and the investor’s needs. The investor has a sum of $100,000 to invest into financial products such as debt, equity, derivatives or cash according to his or her choice. The objective of the portfolio or the investment policy statement is to achieve long term growth of capital. In addition to that, the fund aims minimizing risk of capital loss through portfolio diversification. The portfolio will be monitored, analyzed and reported upon over the chosen time horizon. The return of the funds is evaluated relative to S&P 500 index.P 500 index. The strategy of the investor is to buy the stock and hold it for long term or at least three years, in expectation of long term capital appreciation. In order to mitigate the domestic gloom in the economy, few funds may be invested overseas in order to geographically diversify and earn benefits from emerging and developing markets. Proper diversification will help reduce the overall portfolio risk by spreading stock specific risk
This article will explore the subject of investment and portfolio management. In order to analyze the environments of selected companies, various analysis tools such as Industry Analysis; Portfolio Performance Analysis; Macro-Economic Analysis etc will be included in the paper…
The Investor is a 47-year-old married male who is looking to retire at age 67, the first year he is eligible for full social security benefits. He is a district sales manager for Bob Forsythe Auto, a large and highly profitable dealership in mid-Missouri. His earned income, including salary and bonuses, is $85,000 per year.
His earned income, including salary and bonuses, is $85,000 per year. He does receive a cost of living adjustment on an annual basis of 3.5%. His wife works part-time as a freelance photographer; however, her pay is considered supplemental income, as her workflow is not deemed steady enough to cover anything more than the car payments for their two teenage children, ages 17 and 16.
Since I am a middle aged and have a family that is young and not established calls for a judicious evaluation of the alternatives available.
It is critical to understand the various investment avenues available. Investing in either of the available options comes with a package of advantages and disadvantages.
The author states that Morris Capital is a professional investment that presents financial guidance and the distribution of financial and risk products to local personnel and corporations who realize the need to build their wealth and establish equitable plans for the future expectations. It has developed speedily in a highly competitive market.
The risk aversion coefficient points out the extent to which an investor is risk averse. A higher value suggests that the investor will always tend to make less risky investments. A risk aversion coefficient of 1 implies less risk
The anticipation that, the profits generated in the investments will withstands the risks involved in any investment will stand in as a pillar for the financial projections (Ranganatham & Madhumathi, 2006). In essence, the
itz in 1990 discussed that the position of portfolios risk would be reduced and the expected rate of return would be improved if investments having dissimilar price movements are combined. In other words, Markowitz explained how one could best assemble diversified portfolio and
3 pages (750 words)Assignment
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