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Finance Essay on risk management and investment
Finance & Accounting
Pages 16 (4016 words)
Introduction Selecting the right kind of portfolio poses the greatest challenge to nay investor. It is expensive in terms of time, manpower involved in data collection and analysis. An investor in a portfolio hedge fund seeks to look at the best kind of investment that should bring in the most favourable results in the future.
Different methods of analysis, reconstruction will be used. The process will involve majorly looking at the different kind of risks inherent in the portfolio and determining ways on how to reduce the risk. Executive Summary The investor seeks to come up with a well-structured portfolio that will serve him the purpose of better returns in the future. The investor has identified seven stocks namely: Barclays, BP, Lloyd Banking, European FTS, ISHARES CHINA, EFTS CMOD SECS, MSCI BRAZIL, and TUI TRAVEL. The investor intends on investing in stock shares as his major line of returns. The portfolio seems diverse as it entails stocks from different regions. The shares are all have a fair volatility ranging from a minimum of 4% -13%.This is a major strength in the portfolio as the investor will be least faced by shares that are quite elastic. However, in my view, the investor poses as one who is a traditional investor. He selects only share stocks and avoids investing in other securities such as bonds. There arises a risk in investing shares; one can never tell the exact time to sell them off as predicting when such shares will appreciate becomes a hustle. At the same time, all these companies issue out dividends. ...
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