Investment objectives, Financial Management

Investment Objectives:

Any investment should always start with identifying its objective. Thus, the first step in the pension fund investment management system is defining the investment objectives. Pension funds are invariably long-term investments. The investment horizon in these funds is typically 25-35 years. Thus, the objective of the fund manager should be of long-term appreciation. However, having said that, the amount of safety the fund manager has to practice cannot be stressed enough. The consideration of risk and its constraints are important because it has a direct impact on the returns. As the fund's main focus is on the returns on the investments, it is very important to decide before hand what it aims to achieve by investing. Investment objectives categorize the area or a set of portfolios, that would indicate a successful investment program. Though broad statements of investment objectives are generally included in the mission statement, a list of quantifiable investment strategies for a specific period of time has to be covered in the investment objective. The plan sponsor may set the investment objective at various levels of the plan within its investment program. An efficiency investment objective can be viewed in two ways - incurring the lowest cost for performing the various functions and reducing the economic cost of the overall organization through surpluses generated in these funds.

 

Posted Date: 9/11/2012 1:36:37 AM | Location : United States







Related Discussions:- Investment objectives, Assignment Help, Ask Question on Investment objectives, Get Answer, Expert's Help, Investment objectives Discussions

Write discussion on Investment objectives
Your posts are moderated
Related Questions
discuss the applicability of an operating cycle considering broilers?

Need to Widen and Deepen the Government Securities Market The importance of the Government Securities markets can be evaluated from three angles as follows: From the Gove

What is behind the wave of mergers in the banking industry? A: Various economic factors have caused banking institutions to merge over the past various years. These factors inclu

A. Initial evaluation Comment on the structure of the attached portfolio, and on the financial risks facing Copper Based plc (CB), making use of what you know about how a port

Q. Explain the three kind’s non-financial incentives? Non-Financial incentives: Incentives which cannot be offered in terms of money are known as non-¬financial incentives. Ind

Residual Method We know that a time series consisting of annual data for longer periods is depicted by trend lines. This facilitates us to isolate the component of secular tre

Why the term objective is used for The term is used in a rather narrow sense of what a firm must attempt to achieve with its financing, investment and dividend policy decisions

Debenture A kind of debt instrument that is not secured by physical any asset or collateral is known as debenture. Debentures are backed by the general creditworthiness and sta

What are the primary reasons that companies hold cash? Companies hold cash to do necessary payments to take advantage of opportunities as they arise and to cover unforeseen eme

Chi Square Test as a Test of Independence In real life decision making, managers often have to know whether the differences between the proportions observed from a number of sa