That it, it includes stocks form each asset class based on their expected rate of returns. It is also an active asset allocation strategy in which investor keeps on adjusting the proportion of different investment instruments with the rise and fall of market. In choosing specific investments, investor will need definite ideas regarding a number of features that their portfolio should have.
Generally, there are four basic considerations which foster growth and bring opportunities for investment. This book is concerned with determining that the investor is getting an acceptable return commensurate with the risks that are taken.
Investment decisions have become significant as people retire between the age of 60 and Investment decisions have assumed importance due the general increase in employment opportunities in India. Further, different investment instruments deliver different returns and these different returns are not perfectly correlated Kendall and Rollins, Indirect investments are those in which the individual has no direct hold on the amount he invests.
Besides high rate of interest and safety of principal, an investor has to always bear in mind the taxation angle.
These assets range from safe investments to risky investments.
It deals with designing of optimal portfolio and asset pricing. These financial institutions and development banks offer a wide variety of policies for encouraging savings and investment.
Cash has a definite and constant rupee value, whether it is deposited in a bank or kept in a cash box. Investment is the employment of funds Recommendation of allocation of investment money essay the aim of achieving additional income or growth in value.
For example, due to certain reasons if stock market starts declining, an investor starts selling his assets assuming that the market will fall further and similarly if stock market starts performing well, investor buys stocks with a hope that the market will continue to perform well Focardi and Fabozzi, Basically this strategy is adopted by the investor for diversifying its investment portfolio so that overall risk from the investment can be reduced.
Fixed principal investments are those whose principal amount and the terminal value are known with certainty.
The Indian investor in this context cannot choose his investments very easily. Some are familiar; others are relatively new and unidentified. The multinational and blue chip companies offer very high rates of return and also give bonus shares to their shareholders.
Most investors are risk averse but they expect maximum return from their investment. Most of the investments such as bank deposits, life insurance and shares are payable in the currency of the country.
The dilemma faced by the Indian investor is the reconciliation of profitability, liquidity and risk of investments. Equity shares also have no fixed return or maturity date. These are mostly risk free but low return yielding.
As such there is not thumb rule for time of rebalancing the portfolio in strategic and constant weighting assets allocation, but generally it is advice to rebalance the portfolio when the actual value of the portfolio changes five per cent from its original value.
Fixed and Variable Principal Securities: Existence of Financial Institutions and Services: Essay on the Meaning of Investment: The financial institutions in existence in India are mutual funds, development banks, commercial banks, life insurance companies, investment companies, investment bankers and mortgage bankers.
After reading this essay you will learn about Investment: Price inflation destroys the purchasing power of investments. The public limited company, therefore, is a popular form for investment as the investors benefit from liquidity, convenience and longevity. Sincethere has been a development of the private corporate sector.
The question to reason out is which is the most suitable channel? Therefore, sometimes it is beneficial to invest in some securities for shorter time period to practice tactical deviation and to benefit from exceptional investment opportunities.
Statutory control exerts discipline and curtails some element of freedom. The organizations like Life Insurance Corporation or Unit Trust of India, provident funds are managed according to their investment policy by a group of trustees on behalf of the investor.
Men and women will be responsible for planning their own investments during their working life so that after retirement they are able to have a stable income.
Constant Weighting Asset Allocation: Some of the instruments available are equity shares and bonds, provident fund, life insurance, fixed deposits and mutual funds schemes. The investment decision is of optimizing returns but risk taking capacity varies from investor to investor.
The investor in his choice of investment will have to try and achieve a proper mix between high rate of return and stability of return to reap the benefits of both.
Commodities are bought and sold in spot markets; contracts to buy and sell commodities at a future date are traded in future markets.The financial industry breaks mutual funds into large categories – called asset classes.
Some of the most common asset classes are explained in the graph below. Asset allocation refers to the way an individual investor divides money between these asset classes – and between other non-mutual fund investment options if applicable. Dissertation and Essay Samples: Brief about investment and finance management Finance.
The following essay or dissertation on the topic of finance has been submitted by a student so that it may help you with your research work and dissertation help. Asset Allocation. While putting money in any investment instrument, it is essential to. A money market fund is an investment company that invests in commercial paper, banker’s acceptances, repurchase agreements, government securities, certificates of deposit and other highly liquid securities, and pays money market rates of interest.
Essay about Investment and Money Mary Lutfy Outline Title: Saving Money Topic: Personal Budget for students Thesis: As college students we can all benefit from having a personal budget, it puts you in control of your finances, and can save money that can be used in case of emergency and finally can achieve your goals.
Case Problem Investment Strategy. D. Williams, Inc. is an investment advisory firm that manages more than $ million in funds for its numerous clients.
The company uses an asset allocation model that recommends the portion of each client’s portfolio to be invested in a growth stock fund, an income fund and a money market fund. This report is our recommendation for an optimal investment strategy that would allow J. D. Williams, Inc. to maximize the annual yield of an investment of $, in a diversified portfolio of funds.
Linear Programming Essay My main argument is that linear programming is one of the most optimal ways of resource allocation and making.Download