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An investor who owns stocks in many different companies would most likely see a rise in the overall value of her portfolio during a?
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∙ 8y ago
A bull market
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∙ 8y ago
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What is the main tendency of investment recommendations of investment newsletters?
The large majority of investment newsletters make their money through investor subscriptions. No one is going to pay for investment advice that is subpar and most investors know that many active fund managers underperform the return of the overall stock market. Accordingly there is a tendency for investment newsletters to recommend riskier investments in the hopes of hitting a home run to increase portfolio returns which can then be used in the newsletter's advertising to increase the subscriber base.
What determines how many shares a company issues during it's IPO?
There can be various factors, but a primary reason is the need or desire to raise a certain amount of funds to fuel the company's growth plans. Also, investor demand (or lack of demand) for the companies shares can raise or lower the initial amount of shares to be issued. As well, the overall market opportunity or industry capital requirements can generally determine how many shares will be raised; for example, an airline company will likely need to issue many more shares than a software company.
What is index in stock exchange?
The index in a stock exchange refers to the indicator of the overall performance of the exchange. Usually a number of large conglomerates that are listed in the exchange are chosen for the calculation of the Index. For Ex: The Sensex (Bombay Stock Exchange) comprise of 30 of the top companies in India. Each of these 30 companies has a weightage in the index and the price movement of these companies in either direction can influence the index.
How does individual businesses affect the economy as a whole?
If businesses are small and the overall economy is large (in perfect competition), businesses only affect the overall economy in aggregate. Prices may change because overall demand rises and companies realize they can charge higher prices without losing customers, but no one company has any power over the economy. As the size of companies increases and the number in a sector decreases, the power of an individual company begins to increase. First as a cartel, informally or formally, and then as a monopolist, companies can gain power to bar new entrants through aggressive pricing (e.g., Standard Oil), earn greater profits through supply restriction (OPEC), or secure more advantageous contracts on inputs (Wal-Mart.)
What is a small-cap stock?
There is no exact definition. In addition, any answer will change as the overall size of the economy and companies grow. In general though, as of the time of writing (2007), taken to refer to companies with a market capitalization of $1 billion dollars or less, see here: http://www.answers.com/topic/small-cap for some more information.
An investor who owns stocks in many different companies would most likely see a rise in the overall value of her portfolio during a .?
A bull market
What is overlay in computer programmin termnology?
A management style that harmonizes an investor's separately managed accounts, preventing the formation of inefficiencies. Overlay management uses software to track an investor's combined position from the separate accounts. Any possible portfolio adjustments will be analyzed by the overlay system, which ensures the overall portfolio will remain in balance and prevent any inefficient transactions from occurring.
What is the need for holding cash?
Nearly every investor holds cash. That's because it can play a vital role in meeting a short-term savings goal or play a larger part in a long-term asset portfolio. In this publication, we're going to discuss some of the more practical, as well as strategic, reasons for holding cash in a portfolio. Next, we'll talk briefly about the performance of cash investments over time. Finally, we'll finish up with an outline of the various funds an investor can own as part of their overall portfolio.
What is the need for cash?
Nearly every investor holds cash. That's because it can play a vital role in meeting a short-term savings goal or play a larger part in a long-term asset portfolio. In this publication, we're going to discuss some of the more practical, as well as strategic, reasons for holding cash in a portfolio. Next, we'll talk briefly about the performance of cash investments over time. Finally, we'll finish up with an outline of the various funds an investor can own as part of their overall portfolio.
what is the expected portfolio return on a portfolio comprised of 25% h stock and 75% l stock?
As a well-informed investor, you naturally want to know the expected return of your portfolio—its anticipated performance and the overall profit or loss it's racking up. Expected return is just that: expected. It is not guaranteed, as it is based on historical returns and used to generate expectations, but it is not a prediction. The expected return of a portfolio will depend on the expected returns of the individual securities within the portfolio on a weighted-average basis. A well-diversified portfolio will therefore need to take into account the expected returns of several assets. KEY TAKEAWAYS To calculate a portfolio's expected return, an investor needs to calculate the expected return of each of its holdings, as well as the overall weight of each holding. The basic expected return formula involves multiplying each asset's weight in the portfolio by its expected return, then adding all those figures together. In other words, a portfolio's expected return is the weighted average of its individual components' returns. The expected return is usually based on historical data and is therefore not guaranteed. The standard deviation or riskiness of a portfolio is not as straightforward of a calculation as its expected return. How to Calculate Expected Return To calculate the expected return of a portfolio, the investor needs to know the expected return of each of the securities in their portfolio as well as the overall weight of each security in the portfolio. That means the investor needs to add up the weighted averages of each security's anticipated rates of return (RoR). An investor bases the estimates of the expected return of a security on the assumption that what has been proven true in the past will continue to be proven true in the future. The investor does not use a structural view of the market to calculate the expected return. Instead, they find the weight of each security in the portfolio by taking the value of each of the securities and dividing it by the total value of the security. Once the expected return of each security is known and the weight of each security has been calculated, an investor simply multiplies the expected return of each security by the weight of the same security and adds up the product of each security. Formula for Expected Return Let's say your portfolio contains three securities. The equation for its expected return is as follows: Ep = w1E1 + w2E2 + w3E3 where: wn refers to the portfolio weight of each asset and En its expected return.
What is the meaning of Portfolio analysis?
Portfolio analysis is the systematic way of analyzing products and services. It is composed of the business' product mix to determine the optimum allocation of its resources.
How is corporate parenting different from portfolio analysis?
Corporate parenting is choosing an overall direction for a business. Portfolio analysis is looking at all of the current investments and deciding the best course of action moving forward.
What is lack of diversification?
Lack of diversification refers to an investment portfolio that is not spread out among different asset classes or securities. This increases the risk because the portfolio is more exposed to the performance of a single asset or market. Diversification helps to minimize the impact of market fluctuations on the overall portfolio.
What are the benefits of portfolio investment?
It reduces the risk of uncorrelated assets. So by combing assets that are distinctive from each other it reduces the overall risk.Answer:The biggest benefit of portfolio investment is that it spreads your investment across different types of financial instrument, each with a different risk-return potential. The main reason for this type of diversification is to reduce overall risk that comes from putting all your money in just one type of investment. Many people rely on professional portfolio management services to maximize gains on their investments.
What is the goal of a student investor?
the goal of a student investor is to succeed and to learn all the tricks and rules of investing and share trading. The overall goal would be to become a successful share trader.
How do you find out the profit of the portfolio?
The overall profit earned by a portfolio can be termed as the sum of all the profits earned by the different instruments that form your portfolio. Let us say I invested Rs. 1 lakh and my portfolio is 60% equity, 20% gold and 20% bank deposits. Assuming the average returns for the products last year to be 20%, 12% and 8% respectively my total profit is as follows: Equity: Rs. 12000 Gold: Rs. 2400 Bank Deposit: Rs. 1600 Net Profit: Rs. 16000/- This is the net profit of my portfolio.
What word has betas in it?
betas. it relates the responsiveness of the returns on individual securities to variations in the return on the overall market portfolio
