StudentShare solutions
Triangle menu

Investment theory and property diversification - Essay Example

Not dowloaded yet

Extract of sample
Investment theory and property diversification

The purpose of having all four-asset classes represented in your portfolio is to take advantage of the different strengths of each class. However, stocks are grouped together because they would, as a group, react more alike than any of the other three classes. The same thing is true for the other three classes. Many people use Real Estate Investment Trusts and other liquid investments to satisfy the real estate leg of the asset class tool. The term investment closely relates the meanings in business management, finance and economics, related to saving or deferring consumption. People usually purchase an asset or equivalently a deposit is made in a bank, in the expectation of getting a future return or interest from it. An investor distributes his investments among various classes of investment vehicles (e.g., stocks and bonds) I order to capitulate the cycle of market potentiality. When a portfolio has an active risk, then, we treat it as the annualized standard deviation of the monthly difference between portfolio return and benchmark return. Thus, an active risk of x per cent would mean that approximately 2/3rd of the portfolio's returns (one standard deviation from mean) can be expected to fall between +x and -x per cent of the mean excess return. ...Show more

Summary

This paper investigates the viability of different venture in the discourse of diversifying investment in order to reduce market risk in capital economy. It also assesses the individual portfolio towards the growth of national capital gain in order to sustain the cycle of investment via multiple number of resources.
Author : bashirianjesse
Investment theory and property diversification essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Investment theory and property diversification"
with a personal 20% discount.
Grab the best paper

Related Essays

Portfolio Diversification and Markowitz Theory
However, even much earlier, the article of Fisher (1973) confirmed that the theory has been very alive and was even the core of Fisher’s (1973) contributions to the theory. As recent or late as 2005, the article of Leibowitz and Bova contributed to modern portfolio theory in the area of “allocation betas.” This confirms that modern portfolio theory continues to be the benchmark theory of many analysts.
6 pages (1500 words) Essay
Foreign Market Entry and Diversification
In this respect, the familiarity with the service market with respect to the private and luxury transport segments provides the company with necessary assessment for the diversification in the country and abroad (Lovelock & Wirtz, 2009). In view of the magnitude of diversification component when compared with the main business, a strategic approach must ensue in balancing sustainability of the existing business wing and oversee development of the new wing.
4 pages (1000 words) Essay
Portfolio Investment Theory
A popular theory of exchange rate determination called the portfolio balance theory may be used in estimation of foreign exchange intervention. This theory was founded by McKinnon and Oates (1996) who modified the Mundell-Fleming model. In McKinnon and Oates specification capital flows are caused by adaptations of the market to the changes in financial assets.
4 pages (1000 words) Essay
Scrutiny of Property as an Investment Class
International investments can decrease portfolio risk because income from assets in different countries may not be absolutely correlated (Eichholtz 1996). The theory of risk and return are vital to investment theory and practice. The more the anticipated risk, the greater is generally the return called for.
8 pages (2000 words) Essay
Investment Theory, Rational and Irrational
We may regret our decisions so frequently, and yet we manage to learn from our folly seldom. Human beings are constantly susceptible to a plethora of subconscious tendencies originating from a domain that knows no semblance of logic or reason. Of course, when it comes to money and business we try to make a more balanced assessment of things, keeping our own personal biases aside to a large extent.
8 pages (2000 words) Essay
Property Investment Analysis
prime property is also linked to the upwards only rent review provisions, since a tenant may not always have recourse to a downward review of rent due to the wording of the rent review clauses. The rent review clause provides the investor in the property with a steady income
12 pages (3000 words) Essay
CORPORATE FINANCE CASE ASSIGNMEN 3 Risk and return, portfolio diversification and the Capital Asset Pricing Model; The cost of equity
The investment decision is really a two-pronged question: ‘What is the Potential Income?’ and ‘How risky is the venture?’ (Silbiger). High returns are not the only deciding factor
5 pages (1250 words) Essay
IAS 40 Investment Property
On the other hand, if Generally Accepted Accounting Principles are taken into consideration, then there cannot be found any difference between the two as such. However IFRS has recognized the need for providing specific guidance especially for the property which is to be held by the owner for the purpose of investment
8 pages (2000 words) Essay
Advanced Investment and Theory
According to microeconomics in case of competitive capital markets, the investors are not expected to have abnormal returns from their investment strategies. Though it is self-evident today, previously there were few empirical studies of securities market until 1950s. Market
8 pages (2000 words) Essay
Practice of investment management
ial investors often receive adverts in form of mutual funds and marketing instructions which for instance indicate that a certain fund has delivered or can deliver this amount of returns or an investor contributing to a particular market has become richer by certain amounts
6 pages (1500 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT