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Does a high risk adverse investor choose a risk fre investment?
Wiki User
∙ 16y ago
You cannot be adverse to risk, but you can be averse to it.
Wiki User
∙ 16y ago
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What is an increase in the investment demand curve?
The interest rate is the thing that primarily affects the investment demand curve and an increase in investment indicates a decrease in real interest rate. This makes sense because it is better for borrowers to pay a lower interest rate. Also, better technology can cause the investment demand curve to shift out, also high inventories. If interest rates are expected to be higher in the future, firms will choose to invest now and the lowering of business taxes will result in the investment demand curve to shift outwards.
What is the economic reason for making a risky investment?
An investment is considered risky if the probability of loss is high. However, risky investments can also produce dramatic gains. So if you want to speculate that a given risky investment will pay off, you have to balance that against the possibility that you will lose some or all of the investment. That's why rash or all-or-nothing investment strategies lead to ruin.
What are 3 factors limiting the growth of industry in Latin America?
Political unrest, low education levels and low internal investment (i.e. high dependency on foreign investment) qualify as such.
Which of these statements best describes the econmoy during the late 1970s?
Inflation and Unemployment was high! :)
What is the position of Tycoons Empire international ltd Chennai in MLM business?
How can safe to investment to depositer how can depositer investment to risk to long time how can company profitable and distribut to depositer high interest for depositer investment to 10% p.m. Company working to rbi how can future to company
Why do you choose stocks or bonds?
Both stocks and bonds are investment options available for us as an investor. What we choose depends on what we want. If you want high returns and are ready to take high risk - Go for Stocks If you are satisfied with meager returns like 10% or so and are not willing to take any major risks - Go for Bonds
Your Investment Safety Net?
Perhaps one of the best fixed investments that a more conservative investor, or an investor later in life, can choose is a high yield CD. These special certificates of deposit pay out at a much higher interest rate when compared to regular CDs, and in certain market conditions are the highest paying fixed investment one cah choose. Usually, the best time to invest in a high yield certificate of deposit is during adverse economic times. Investment institutions are then eager to retain funds that many people must pull out to pay bills, and they are therefore willing to pay out at much higher interest rates. Because certificates of deposit are long term investments, the investor can lock in a high interest rate and actually protect him or herself from falling interest rates in the future during an economic recovery and subsequently less volatile economic markets. Certificates of deposit are best used with expendable funds that the investor will not have reason to touch in the next few years. CDs usually have maturation periods, or periods until final payout, of 6 months to 10 years. The longer the maturation period, the higher the interest rate paid. Of course, under the terms of most agreements, the investor agrees not to withdraw funds against the principal of the certificate. If they do, there is usually a penalty incurred which ensures that the bank retains funds should the contract be broken by the investor. High yield CD interest rates are usually between 2 and 4 percent, depending on the prevailing economic conditions. Because high yield CDs are fixed investments, the investor runs the risk of erosion of the value of the investment due to future inflation. However, there are certain types of certificates of deposit which allow for one change to a higher interest rate. However, there are additional considerations that an investor must agree to in order to invest in such a vehicle, such as a higher minimum principal and longer maturation periods.
What is the role of mutual fund?
The role of a mutual fund is to provide avenues of investment for the normal investor who does not have the expertise or the time to have a direct investment in the stock marketbut at the same time wants to gain exposure to the stock market for its high return potential.
How to Pick an Investment Banker?
Before even vetting investment bankers, an investor must determine what kind of investment banker that he or she would be. The point of this exercise is to pick someone who has your same personality when it comes to investing. You will understand this person more and be much more interested in his or her strategy. For instance, if you have a high risk profile, then you want a high risk banker. If you like dealing in small cap stocks, then you want an investment banker that specializes in small cap stocks. Pick the investment banker that you would be if you had the time.
Invest in mutual funds or bonds?
It depends on your investment goals and risk apetite. If you are a high risk investor willing to take a few risks with your investment for higher returns go for Mutual funds. If you are a safe investor willing to compromise on returns for safety then go for bonds. Bonds are debt instruments and hence safe whereas mutual funds are stock market instruments and hence carry a risk.
How do you select a mutual fund?
The first step is to find out the objectives of the investment. The objectives of an investment in mutual funds will be low risk or high risk, short or long term focus on liquidity, fixed income or equity. If the objectives of the investment are the same as that of the investor, then one can go on to the next step. It is very important to evaluate the past performance of the mutual fund. Through this evaluation the investor can get an idea of how the performance of the fund compares to other available options. One can also determine if the objectives that are stated have been fulfilled. This can be achieved by finding out which mutual funds have performed the best in the market. A good mutual fund should have a track record of consistently outperforming its benchmark. It is also a good idea to evaluate the performance of the mutual funds over a number of different periods of time. These could be three months, one year or three years depending on what period the investor wishes to keep his investment. The mutual funds that fall among the top five should then be shortlisted by the investor. The third step to choose a good mutual fund is diversification. An investor must diversify his funds in order to expand the amount of investment. This means that the investor should select two or more mutual funds that have similar investment objectives. This will help the investor to minimize the risks involved with his investments. Before choosing a Mutual Fund, the investor should examine the costs of the fund. These include sales loads, annual fund expenses and also management fees. There are a lot of Online trading portals that are listed with the NSE and BSE that help you to choose the right funds by providing all the necessary market information. Reliance Mutual Funds, ICICI, HDFC, Franklin Templeton are some of the best that are available. Reliance Mutual Funds provides a lot of information to investors through their knowledge centre.
Are there any banks that offer a high yield savings account?
There are many banks that offer a high yield savings account. The best bank that offer the best high yield savings account is Charles Schwab investment bank. They have what is called the high yield investor savings account, where there are account minimums and no monthly fees.
What are some mistakes that should be avoided in investing for beginners?
One mistake for a beginning investor would be to try and get rich quickly. You should not sink all of your money into a high-risk investment. It would be best to invest in different investments.
What is the meaning of venture capital?
Venture capital is money invested in start-up companies to help them get off the ground. It is considered to be high risk for the investor, but can result in above-average returns. === ===
What role does risk play in investment?
Risk is the probable ability of an investment to fail. I does increase two factors for the investor it garners increased valuation return. This higher value return is to lure or draw investors to the investment that may have a high margin of failure. The other factor that risk plays many individuals are wary of losing hard earned money making the opportunity favorable for more individual gains for the person willing to access it. So, it separates and makes the venture a rare opportunity with little competition for the investor. Also, high risk margin in an investment only draws individuals with the excess resources and money to substantially improve opportunity for the investment. There is little likelihood of lawsuits as the risk is established and listed upfront. All investments afford some gamble - to either lose or earn fortunes.
Understanding Mutual Funds?
A mutual fund is an investment fund that is professionally managed and raises capital from a wide variety of investors. A mutual fund is often a preferred investment over individual securities because the investment provides its investors with a diverse investment. When looking at investing in a mutual fund, there are several aspects that an investor should take into consideration. The first aspect of a mutual fund that an investor should understand before investing is the mutual funds investment strategy. Each fund must follow a certain investment strategy, although the strategies can vary significantly from one fund to the next. Some mutual funds are growth funds which aim for high returns, but accept high risk. Other funds are more secure, but offer lower potential returns. Regardless of the investment strategy, a mutual fund will invest in a wide variety of securities, which helps diversify the investments. Each fund manager will select their own balance of high and low risk securities. The second aspect of a mutual fund which must be considered is the history of the fund. Each fund manager should be able to provide a potential investor with a report of average returns. The report should show returns received over the past year, three year, and five year periods. Furthermore, the investor should get a strong understanding of the dividend that they can expect to receive each year. An investor should also research online and see if any other investors have large complaints about the fund or the fund manager. An investor who wants to invest in a mutual fund also needs to get a strong understanding of the expenses associated with the mutual fund. The expenses that you will be charged can have a large impact on the total return that you will receive. Some of the mot common fees that are charged are management fees, service fees, broker fees, and other fees such as legal and accounting fees.
How can you benefit from a high yield investment?
A high-yield investment program is an investment scam that promises unsustainable high return on investment by paying previous investors with the money invested by new investors. The only benefit is that you may get your money back. They are to risky.
