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How much importance should be given to the fact that while the gains from the retirement of a loan can be estimated the returns from an investment always carry a risk?
Wiki User
∙ 8y ago
Maybe it is because of the uncertainty of the economy ( the ups and downs of the stock market)
"How much importance should be given to the fact that (while the gains from the retirement of a loan can be estimated) (the returns from an investment always carry a risk?)"
I sincerely apologize for getting technical with grammar but I would like to answer your question as accurately as possible. I bracketed the parts of your question because I'm not sure what you're actually asking. I will try to answer it in the two ways I can see it being asked.
1) How does the retirement of a loan impact investment risk?
The reduction of debt on the books of a corporation can positively impact its financial strength, thereby potentially reducing some of the risk involved in investing in that company. However, any investment, including a savings account, will always carry some element of risk.
(With a savings account you can carry "opportunity" risk. By not investing in the bond or stock markets, or anything other than a savings account, you lose out on the opportunity to earn higher returns.)
2) How much importance should be given to the fact that the returns from an investment always carry a risk, regardless of potentially positive factors affecting a companies balance sheet?
Simply put, risk is one of the most, if not (arguably) THE most, important factors in evaluating a stock to purchase into, or sell out of, your portfolio.
Through careful analysis and/or just listening to the consensus opinions of stock researchers, it's plain to see how much risk a stock has relative to the market and stocks in its peer group.
What is much harder to evaluate, and what can only be answered by you, is how much risk is appropriate for YOU. There are plenty of online resources to help you determine that for yourself. Or you can seek out the help of a qualified financial professional.
. Again I'm sorry for being picky with grammar. Good Luck!!
Wiki User
∙ 8y ago
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What is the meaning of TRRCX?
TRRCX is a retirement fund investment. It is name for T. Rowe Price. The "T. Rowe Price Retirement 2030 Fund" (current version), is a investment fund meant to be similar to a 401 k investment. While diversifying investments, they claim to have a stable underlying mutual fund investment, and anticipate high returns.
Importance of decision making?
The importance of decision making is that it helps in planning for the next course of action. In business, good decisions will yield great returns on investment.
How much importance should be given to the fact that while the gains from the retirement of a loan can be estimated with certainty the returns from an investment carry a risk attached to them?
The importance is in practicality, to me. Retiring a loan means that I have more discretionary income to invest. Since my income comes periodically, the investment would be on a average cost basis (rarely are prices the same over time, and I would be buying a few at a time), so you could make a reasonable expectation of the return. To do both at the same time, there would come a point (I don't have the calculator though) where the differences between the interest paid and the unrealized interest from the investment would be nearly zero.
What are the two key parameters used to make investment decision?
The two main parameters are: * Returns - Amount of returns we can expect on the investment * Safety/Risk - How risky the investment is. Generally risk and returns are directly proportional. Higher the risk on investment, higher would be the return on investment.
The Importance of Knowing Returns?
An investment return before the rise of the Internet was little more than what the investment advisor on the other end of the phone had told you that you had made. However, now, investment returns can be easily checked online for absolutely free - and on top of that, the assessments made by investment advisors can be easily checked by the most novice of investors. It is always a good policy to use one of these free investment return calculators online to get a sense of the market rate for any investment in which you are planning to put your money.
How do I find out how much I will get in investment returns?
You should do your research prior to investing to find out the historical rate of return on your prospective investment. However, past returns are no indication of future returns.
Under what circumstances would I use an IRA CD instead of a normal IRA?
A IRA CD have better returns that a regular IRAs. A CD IRA is a better investment option and can provide more money for retirement.
Objective of investment?
The objective of investment is to get returns. This is the reason why people will evaluate all the risks involved so as to estimate the return on investment.
How many kinds of investments are existing?
There are different types of investments available for a quick investment option like cash investment, debt securities, Stocks trading, mutual funds, derivatives, commodities, and real estate. One need to understand the importance of investment and the risks on returns depending upon the choice of investment plans. Short term and long term investment choice makes a good difference to meet one's requirement on investment.
What are the Questions asked by customer related to investment?
Some common questions are: # Risk profile - Chances of losing the investment # Returns on Investment # Investment Tenure # Reputation of the investment house # etc...
Investment to achieve high returns quickly?
venture capital
Is a vanguard variable annuity a good investment?
A Vanguard variable annuity does seem be a good investment in the current market. As with any investment, there are no guarantees of profitable returns.
