Money Management Final-1 Essay Example | Topics and Well Written Essays - 3000 words

Money Management Final-1 - Essay ExampleAfter analyzing own find profile, the investment funds decisions bequeath be made, that in which investment vehicle I need to invest. This report pass on focus on the investment outline and objectives need to be adopted, difference among ETFs and the mutual funds and how to manage the portfolio risk in order to devour good flow in investing. Further, it will also take into stipulation the financial instruments which are accessible for investments, the role and influence of the main players in the financial markets, relationship between the financial markets and the macroeconomic forces and the benefits and risks of investing in different investment vehicle. Analyzing Risk Profile All investors bring forth contradictory attitudes towards risk, so when it comes to investing, it is essential that we need to judge our own risk profile including that the returns on my investments could vacillate broadly from year to year and also how comf ortable I am with the likelihood of losing money. Understanding in the flesh(predicate) risk tolerance will provide assistance in selecting a suitable plus allocation. My asset allocation includes stock, mutual fund, cash and property. It depends broadly on the time horizon and my risk tolerance ability. So, in order to judge own risk profile, following points need to be taken into consideration investment funds Experience The investment experience will indicate my understanding of financial markets such as moreover started investing or know the basics of investing or investing for several years or have enough knowledge of financial markets and have been making investment decisions boldly (See Appendix A). So, my experience is that I understand the fundamentals of investing. Risk Tolerance In order to ascertain an investment strategy that suits my risk profile, first I need to think about the likelihood that my investment value may decline although this may be temporary and must be prepared to admit the probability of disconfirming return at any time for the purpose of likely higher long term returns. It will focus on the factors that whether I will neglect light term losings or implicated in collecting regular income from investment or long term growth in investment value or want protection against inflation. So, I consider neglecting any short term losses and if in any case, the investment value fell by 20% in a short time then I would like to hold the investment and sell nothing (See Appendix B). investment Goals and Objectives The investment goals include capital growth, purchase of new car, to purchase a new plot of land, to own a house and a young childs education in future. My investment goals are for long term, so I afford to take some risk for a higher return. My investment objectives include investing in mutual funds because of its diversification benefits, property and stocks because they offer higher returns than repair interests. It also includes investing in cash because it is highly liquid