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I've not choasen the topic

The capital market is a crucial platform from where the companies issues shares and raises capital and on the other hand, the institutional and individual investors buy those stock in order to make higher return on their investments. It has been empirically proved that the return on stock been the higher that any other investments and on the hand, stock market is also very risky. Therefore, this market is very volatile and requires very efficient and effective strategies for making investments in stock market. The stock markets are highly uncertain and it is difficult to predict and therefore, the chances of loss is higher without proper investment plan (Ait-Sahalia and Hansen, 2009, p.619). 1.1. Thesis of the paper This paper will attempt to present an argumentative discussion on the investment strategy for a stock market. Due to its high volatility nature, many have argued against the stock investment by claiming it as a zero sum game (White, 2003, p.85). The following figure presents volatility of the FTSE for the last forty years. Figure 1: -Standard Deviation of Monthly FTSE Stock Returns from Daily Returns in the Month, 1969-2010 (Source: Schwert, 2011, p.27) The above figure clearly indicates high volatile nature of the stock market which acts as negative force against investors seeking high from their investments. 2. Strategic steps in Investments in Stock Market The most of investors who faced great loses due to investments in the stock market is mainly caused by their lack of knowledge and lack of general awareness. In fact, many investors having very limited knowledge regarding stock investments tend to face loses from the stock market investments and their investment behavior mainly driven by behavioral finance. The investors often make investment based on their behavior which in mainly driven by unconventional market behavior. For example, investors should buy a stock when it comes to its lower boundary and sells just before it is supposed to fall (Baker and Nofsinger, 2010, p.43). However, generally, investors do the opposite and faces loss. However, there are also certain factors that must be taken into consideration, and the entire investment should follow a systematic steps. These steps are given below for making at least 40% return on investment from stock market within 2 years with minimum risk level. 2.1. Internal Analysis and Development of Specific Objective Investor seeking to make investment in the stock, the first task should be to analysis the international factors that affect the risk tolerance and available fund for making investment in stock market. The risk tolerance factors are age, income & wealth level, family background & condition etc. The investors must go for this internal analysis to understand their risk tolerance level. Based on this analysis, the investors should determine the required return of investment as according to financial theory, higher risk leads to higher return and vice versa (Wilson, 2008, p.25-27). Finally, the objective of investment can be frames in accordance to outcome of internal analysis and objective must be ...Show more

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Steps for Investment Strategy for Stock Market Table of Contents 1.Introduction 3 1.1.Thesis of the paper 3 2.Strategic steps in Investments in Stock Market 4 2.1.Internal Analysis and Development of Specific Objective 5 2.2.External analysis for Stock/Company selection 5 2.2.1.Macroeconomic Analysis 6 2.2.2.Data Collection 6 2.2.3.Fundamental Analysis 6 2.2.4.Technical Analysis 7 2.3.Estimation of Intrinsic Value and Buy-Hold-Sell Strategy 7 2.4.Framing of Strategic Portfolio (diversification) 8 2.5.Monitor and Manage Portfolio based on Market Condition 9 2.6.Pre-return and Post-return Evaluation 9 3.Conclusion 9 3.1.Suggestion 10 Reference 11 1…
Author : pschaden
Ive not choasen the topic essay example
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