Also by diversify portfolio investors are able to earn more consistent returns on their investment and if one stock does not perform well and does not yield positive return then the other one could perform well and yield positive return thus the overall risk of the portfolio is reduced and investors are in a position to save their investment from fluctuations of stock as well as market. There are different techniques that investors around the world use to diversify their portfolio and maximize their return. Investing internationally or in the international markets is one of the most common techniques that investors use to diversify their portfolio. This gives more chances to investors to enhance their investment and earn better returns. In addition to while making investment internationally, investors have also used alternative investment vehicles to diversify their portfolio and to enhance their investment. This report analyzes how investors around the world have been diversifying their portfolio by investing internationally and by making use of alternative vehicles. international portfolio diversification on an investment portfolio When investors are investing in a particular asset they normally face two types of risks. These two types of risk are; systematic risk and nonsystematic risk. These types of risk influence the stock price and thus the return of the investors is changed. Non-systematic risk is the risk of a particular asset, stock or company in which the investment is being made and it is also called the diversifiable risk as it can be reduced drastically by creating a portfolio and diversifying the investment. The other kind of risk is called the systematic risk and it is the market risk or risk of a portfolio. The risk of a stock is reduced by diversifying the portfolio and by making investment in stock of different industries. However even after diversifying the portfolio in a particular market, the market risk cannot be reduced (Gitman, 2003). The following graph shows that as the investor diversifies its portfolio the non-systematic risk of the portfolio reduces and as the portfolio becomes more and more diversified, the non-systemic risk reduces. However by diversifying portfolio, the systematic risk or market risk is not diversified or reduced. Market risk is the risk that can be because of fluctuations in the market, economic condition of the country, political instability and several other macroeconomic factors that would directly or indirectly impact the stock prices. (Source: Systematic versus Non-Systematic Risk) So in order to enhance the investment and further reduce the risk of the portfolio, investors have started investing stocks and assets in other countries as it reduces the market risk. By investing in different markets, the impact of change in the return because of a particular market is reduced in the overall investment and therefore the overall risk of the portfolio is reduced. The following graph reflects that the risk of the portfolio is further reduced as stocks from other parts of the world are included in the portfolio. Therefore diversifying portfolio and investing in different stocks around the world would reduce the risk of the portfolio and therefore it would enhance the investment. So, investing internationally would reduce the market risk and thus the overall risk
Cite this document
(“Investment Enhancement Paper Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/56228-investment-enhancement
(Investment Enhancement Paper Essay Example | Topics and Well Written Essays - 1000 Words)
“Investment Enhancement Paper Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.net/finance-accounting/56228-investment-enhancement.
Cited: 0 times
Running Heading: Investment Enhancement Investment Enhancement [Name of Student] [Name of Instructor] [Course] introduction Maximizing return on investment is one of the most important goals of investors around the world and in order to improve the return on investment investors are investing in different assets, stocks, bonds etc…
The position paper looks at the strength of the company particularly in finance, human resources, technology and intangible resources, and draw upon them the weaknesses in the strategies used in the operation. It will look at how Air Asia manages the key resources together to become the number one low cost carrier in Asia.
Justify your answer fully by identifying the possible benefits and the possible violations of rights and justice that you believe may be associated with the building of the plant, and explaining which you think are more important. The Interfaith Centre, which was involved in corporate responsibility in South Africa, believed that Texaco and SoCal, the American owners of Caltex, supported the South Africa’s apartheid system that legalized racism and deprived the blacks, human rights such as restriction from voting, collective bargaining, entitlement to low wages and living in segregated areas away from their families.
Introduction The Apartheid policies of South African Government in 1970s and 1980s provoked social unrest and brought the crisis situation for oil industry especially Caltex. The Caltex was a joint subsidiary of Texaco and SoCal (now Chevron), which operated oil refineries in South Africa and its assets were worth $100m in 1977.
Comprehending international stock market relations has become a significant tool for business people who desire to diversify their portfolios on a universal foundation. As a result, it is essential to settle on the nations whose stock prices are not moving in the same direction, are concurring, and those that are not related at all.
In the United States, the trend is the same: over 60 percent of stocks are controlled by this type of investor (Burton and Brown, pp.223). The OECD also reported that in its member economies, institutional investors are growing on average of 9 percent per year since the 1990s (OECD, 2000, pp.195).
A common cognitive enhancement drug is Ritalin that improves Attention Deficit Hyperactivity Disorder (ADHD). However, only people do not use them with cognitive deficiency as healthy people seeking to stimulate their brains and increase attention use them too. In addition, there is much research effort put into trying to develop memory boosters in a bid to improve the memory and performance of healthy people to prevent the memory loss that occurs during middle and old age.
However, using cross border investment as a diversification tool does not only come with substantial opportunities and enhanced returns for the investors. There happen to be several issues associated with adding foreign financial and non financial assets to a portfolio.
The companies in United Kingdom are also increasingly taking decisions to invest considerable funds in the Chinese market so as to avail the prevailing business opportunities.
There tend to be several opportunities for multinational corporations in the Chinese market with regard to low cost production and boosting economy etc.
It is traded with the symbol name of “SIX” in NYSE.
Cedar Fair Entertainment Company owns and operates amusement and water parks in the United States and Canada. It was founded in 1983 and is based in Sandusky,
Some risks are; loss of capital and purchases of non profitable securities. Some securities are not registered hence, carry great risks of loss.
A woman intends to invest and has her investment portfolio. She may invest in the Standard &
1 pages (250 words)Essay
Got a tricky question? Receive an answer from students like you!Try us!
Let us find you another Essay on topic Investment Enhancement Paper for FREE!