StudentShare solutions
Triangle menu

Financial Institutions and Instruments - Essay Example

Nobody downloaded yet

Extract of sample
Financial Institutions and Instruments

An investment strategy has more to do with responsibly, and often conservatively, managing an investment portfolio in order to maximize gains with a minimum of maintenance, a low number of transactions (and their attendant costs), and a minimum of risk.
This paper will explore the investment strategy approach for the most part, whilst also exploring some of the more simplified and well-tested technical strategies of the trading approach. A simplified investment strategy is the one most likely to be employed by an ordinary person with a modest portfolio, a minimum amount of time to devote to managing that portfolio, and limited ability, desire, and/or resources to devote to the use of sophisticated analysis tools. In other words, the kind of person who has a day job as opposed to being a fulltime day trader, and needs a strategy that includes a fair degree of automatic execution and pre-determined portfolio protection devices. Finding a consistent strategy that meets these requirements would be useful to a great number of people who are currently disadvantaged in the area of maximizing their investment gains by lack of financial resources, time, and expertise, whilst at the same time they may be very dependent on their investment performance for their future financial security needs.
Much work has been done in pursuit of a system that would consistently provide excess returns, with mixed results. The very existence of technical analysis seems to belie the Efficient Market Hypothesis. Some researchers have concluded that "technical rules do not earn excess profits over a simple buy-and-hold strategy," (Beechey, Gruen, and Vickery, 2000). However, there are aspects of market performance that are not completely explained by EMH, and the available evidence suggests that "financial market returns are partly predictable, in ways that sometimes conflict with the Efficient Market Hypothesis" (Beechey, et al, 2000).
Other discordant findings regarding the EMH versus actual stock performance include evidence that in the stock market, "shares with high returns continue to produce high returns in the short run (momentum effects). In the long run, shares with low price-earnings ratios, high book-to-market-value ratios, and other measures of 'value' outperform the market (value effects)." Further, "at times, asset prices appear to be significantly misaligned, for extended period," (Beechey, et al, 2000). Whenever inefficiencies such as misalignments or mispricings occur, an opportunity for excess returns also occurs - if someone with a technical analysis filter is watching for them and knows when and how to act on them.
At best it would seem the EMH semi-strong or weak version best describes what is observed in the markets. Therefore it would seem that there may, after all, be something to be gained from at least a cursory investigation of the technical analysis tools that are most readily available to the average investor, and that are easy to understand and use, and that is the criteria that was used when choosing technical analysis tools for inclusion in the investment strategy that will be outlined herein.
St. George's Bank has been traded on the Australian exchange since 1992, and is currently the fifth largest bank in Australia. It shares with the banking sector a 100% ...Show more


The object of this paper is to devise a profitable trading or investment strategy for the common stock of St. George's Bank (SGB.AX), to illustrate and explain the strategy clearly, to estimate the likely profitability of the strategy, and to provide supporting evidence for these assertions and conclusions.
Author : rowezaria
Financial Institutions and Instruments essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Financial Institutions and Instruments"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Financial Markets and Institutions
According to Allen and Gale (2000, chap 1), Financial intermediaries can be broadly classified into: deposit taking institutions such as banks, credit unions, savings and savings societies; Insurance schemes such as life insurance policies; investment ventures such as retirement benefits schemes and mutual funds.
6 pages (1500 words) Essay
Financial Markets and Risk
It therefore enables borrowers and savers to meet in the most efficient manner. It is also fundamental to note that this market facilitates economic transactions by hedging and trading in resources and goods. An efficient financial market will enable capital allocation to investments that provide maximum return.
4 pages (1000 words) Essay
Financial Institutions & Markets - Financial Innovation
can be supposed to be the attributing factors towards the development of financial innovation. Innovations are mainly done to achieve the basic objectives of financial systems like facilitating the required payment instruments, increased savings, reduction in costs, etc.
6 pages (1500 words) Essay
Financial Markets and Institutions
Financial market securities include bonds, stocks, commodities, agricultural goods and precious metals. The derivatives market is financial market for derivative instruments such as options contracts and futures contracts. The characteristic feature of derivative instrument is that the value of derivative is derived from the underlying.
5 pages (1250 words) Essay
Financial Markets and Institutions
This paper will define what financial markets and institutions are and their implication in an economy particularly in a largely consolidating world market. Financial markets "consist of agents, brokers, institutions, and intermediaries transacting purchases and sales of securities." The individuals and institutions operating in the financial markets are linked by contracts and communications networks that form an externally visible financial structure, laws, and friendships.
10 pages (2500 words) Essay
Financial markets and institutions
Poorly developed financial markets and institutions impose a restriction on economic development. Financial market is a system which
6 pages (1500 words) Essay
Financial Institutions
These days people are entertained by a variety of instruments being offered by various financial institutes to fulfill their needs and requirements. But as we know that to achieve something, one has to sacrifice other; in the same manner, to avail those
4 pages (1000 words) Essay
Financial Markets and Risk
4 pages (1000 words) Essay
Fair Values in Accounting for Financial Instruments
The derivative financial instruments that were generated and developed under this background have caused deep impacts on accounting theory. In this way, people have begun to re-examine the appropriateness concerning the use of historical
5 pages (1250 words) Essay
Financial Market Homework
These economic markets are aggregations of buyers and sellers of financial instrument (such as company stocks, currencies, treasury bills and bonds) which can be a specified location. However, several markets
3 pages (750 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Let us find you another Essay on topic Financial Institutions and Instruments for FREE!
Contact us:
Contact Us Now
  • About StudentShare

  • Testimonials

  • FAQ

  • Blog

  • Free Essays
  • New Essays
  • Essays

  • The Newest Essay Topics
Join us:
Contact Us