Evaluate investments by assessing risk and return potential

Assignment Help Finance Basics

Reference no: EM131458785

Assignment: Investor Scenarios

Part I - Now that you have identified your risk tolerance, you are going to begin to develop your own personal investment strategy that will serve as the introduction to your final project submission.

In one page, you are to design your own personal investment policy. In the policy summary, be sure to identify the following main points:

1. Reserve Funds based on your monthly expenses
2. Risk Tolerance
3. Suitable Investments based on Risk Profile - (Focus on Investment Type, not specific investments)
1. Hint: Suitable investments to meet asset preservation are savings accounts, money markets, time deposits)
4. Investment Time Horizon

Use APA Format

Steps to investing:

1) Meet investment prerequisites: make sure you have taken care of basic needs such as: food, shelter, clothing, and have cash reserves available for emergencies (Smart, Gitman, & Joehnnk, 2017,p.14).

2) Establish investment goals to direct you towards the correct type of investments to make to: (a) accumulate retirement funds, (b) enhance income, (c) save for major expenditures, and (d) shelter income from taxes (Smart, Gitman, & Joehnnk, 2017,p.14).

3) Adopt and investment plan: once you have established your goals create a written plan that includes time frames and risk levels you are willing to take (Smart, Gitman, & Joehnnk, 2017,p.15).

4) Evaluate your investments by assessing the risk and return potential, this topic will be studied further in the e-textbook (Smart, Gitman, & Joehnnk, 2017,p.15).

5) Select suitable investments after you complete due diligence and determine how much risk you are willing to take (Smart, Gitman, & Joehnnk, 2017, p.15).

6) Construct a diversified portfolio to avoid putting all of your eggs in one basket; you will be able to earn higher rates of return while reducing risk through diversification (Smart, Gitman, & Joehnnk, 2017).

7) Manage the portfolio of investments to make sure the actual performance is close to the expected performance or rebalance your portfolio if needed (Smart, Gitman, & Joehnnk, 2017).

Reference no: EM131458785

Questions Cloud

What is the role of a sales incentive : Suppose you are hired as a salesperson for a firm that offers prep courses for standardized tests. Where might you find some leads?

Identify common investor fallacies and fears : Specifically identify common investor fallacies and fears that contribute to market volatility. Your report should be a minimum of 2 written pages.

What action should plant management take : What action should plant management take at the 5% level of significance - What is the probability that the null hypothesis would be rejected if the population defective rate is actually 8%?

What is expectancy theory : What is expectancy theory? How do sales managers use it? What is the role of sales promotion in the marketing effort?

Evaluate investments by assessing risk and return potential : Evaluate your investments by assessing the risk and return potential, this topic will be studied further in the e-textbook (Smart, Gitman, & Joehnnk, 2017,p.15)

What is trade promotion : Cross-selling can be an effective way for a firm to expand. Locate an advertisement for a firm you believe could benefit from cross-selling.

What are the key legal factors present in the scenario : What are the key legal factors present in the scenario? What are the 4 elements of a valid contract? How do they relate to the scenario in question?

Intellectual property law in the uae : This project aims at providing you with practical experience regarding Business trademarks or copyrights and whether there is an infringement of the Intellectual Property Law in the UAE.

Describe the intervention in detail : Explain how this places your adult participant at increased risk for developing a preventable disease(obesity, Type II Diabetes, etc.), which is described.

User Account

All Pages