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Financial Investment - Research Paper Example
Author : runtesavanna
Finance & Accounting
Pages 12 (3012 words)
Financial Investment Introduction The investment style of an individual varies from another depending on various opportunities and investment constraints. Individuals generally invest a certain portion of the surplus left after all necessary expenditures are carried out…
Ratio analysis and share price analyses are 2 most important and commonly used tools to analyze the financial position of a particular stock. A proper fundamental and technical analysis generally provides a basic idea regarding these aspects and helps investors make informed investment decisions. Generally the intrinsic value of the stock is determined from the financial facts given the annual report of the company using free-cash flows and it is compared to the current market price of the stock. When the stock is found to be undervalued then it provides an opportunity for the investor to buy the stocks at lower current price and then sell it in future when stock prices approaches target price. This strategy will help the investor make profits by buying stocks at lower price and then selling it when stock prices appreciates and ceteris paribus. Options for Investment Decision While there are many options available to an investor for investment, it is important to note that not all investment destinations are equally safe for investment when risk of investment is considered. The safest investment destination is government securities because there are very limited chances that the government will default. ...