Beruflich Dokumente
Kultur Dokumente
Other Investments
Owned Business/Assets Investment consist of Investments in both
tangible and intellectual assets necessary for businesses to deliver
superior quality goods and services as well as providing valuable
response to needs of various stakeholders as a mark of corporate
responsibility to its,environment,community, industry and the entire
country as a step to entry to the international scene or arena.
Hybrid
Investment as said earlier is a Plan for getting rich or creating wealth. Any
assessment or consideration should as a matter of seriousness have a
basis. Other wise, it would be a scenario of someone in struggling, denial
and impulsive situation.
Everyone has heard the mantra in recent years that you must have a
portfolio of investments in order to live out quality retirement years.
Before you start throwing money at every stock and bond you see, or
especially if you already have started doing that, you need to have a little
Q&A time with yourself.
By knowing these basics will help you build the correct investing strategy for
you and make sure that you consider all the important points when making
investment decisions.
Personal Risks
This risk deals with the personal level of investing. The investor is likely to
have more control over this type of risk compared to others.
Timing Risk: You buy the right security at the wrong time or selling the
right security at the wrong time. There is no surefire way to time the
market though many have tried.
Tenure Risk: This is the risk of losing money while holding onto a
security as its value decreases.
Financial Risk: This is the danger that a corporation will not be able to
repay its debts. This has a great affect on its bonds, which finance the
company's assets. The more assets financed by debts (i.e., bonds and
money market instruments), the larger the risk of default. Studying
financial risk involves looking at a company's management, its
leadership style, and its credit history.
Fluctuation in the market may be caused by any or all of the following resulting
in market risks above
Market Risk: This is the chance that the entire market will decline, thus
affecting the prices and values of securities. Market risk is influenced by
outside factors such as embargoes and interest rate changes.
Liquidity Risk: This is the risk that an investment will experience loss in value
when converted to cash.
Interest Rate Risk: This is the risk interest rates will rise resulting in an
investment's loss of value due volatility in the market not addressed or
appreciated by the investor due to his low level of investment and market
confidence .
Inflation Risk: This is the danger that the dollars you invest will buy less in the
future because prices of consumer goods rise. When the rate of inflation rises,
investments have less purchasing power. Investments earning fixed rates of
return are especially vulnerable to this loss.
Exchange Rate Risk: This is the chance that a nation's currency will lose
value when exchanged for foreign currencies.
Re-investment Risk: This is the danger that reinvested money will earn
returns lower than those earned before reinvestment. Dividend-
reinvestment plans are a group subject to this risk. Bondholders are
another.
Economic Risk: This is the danger that the economy as a whole will
perform poorly. Economic downturn stock prices, the job market, and the
prices of consumer products.
Industry Risk: This is the chance that a specific industry will perform poorly.
Problems in an industry affect the individual businesses involved as well as the
securities issued by those businesses. This may also spill over to another
industry with which there is either a linkage or relationships.
Tax Risk: This is the danger that rising taxes will make investing less
attractive. Businesses that are taxed heavily have less money available for
research, expansion, or dividend payments. Taxes can also be levied on
capital gains, dividends and interest earned by the investor.
Political Risk: This is the danger that government legislation will have an
adverse affect on investment. This can be high taxes, prohibitive licensing, or
the appointment of individuals whose policies interfere with investment growth.
Political risks include wars, changes in government leadership, and politically
motivated embargoes.
Risk Management
Risk Management is an Enterprise wide risk assessment, analysis,
appraisal and control in creating wealth and delivering superior value to
both Business and other stakeholders as demonstrated in quantitative and
qualitative measures.
Inflation
Conservatism
Asset Allocation.
When it comes to investing, there are some simple rules that you can use as
general guidelines to help you make better decisions in your investments.
While it is important to look at the specific circumstances relating to you and
your money, as a general guideline these "7 Rules of Successful Investing"
will apply to most people, most of the time. Understanding these basic
concepts are an important foundations to rely upon to ensure a good
investment strategy.
1. The higher the investment returns, the higher the risks involved with the
investment — this is true virtually 100% of the time. If an investment seems
too good to be true, it probably is. So, be very careful and keep a level head.
4. When investing, your emotions are usually your greatest enemy and
can easily derail you from your long-term investment plan if you're not
careful. Don’t succumb to fear when the market is dropping and don’t
become greedy when prices are rising.
6. Don't invest in things you don't fully understand. Always and carefully
read the prospectus. If you can't understand the risks, costs and liquidity
of the investments, do not make it until you do. If you can't understand an
investment fully, get help and do more research until you do.
7. You need to make a clear investing goals. It's important to take in your
personal and/ or corporate factors when making these goals. You need to
know
· Your current resources that you can put toward investments
· Your investment risk tolerance
· The time horizon for the investments
· The ultimate investment goal you're trying to reach.
Design your investment plan taking into account all these factors as they
apply to you, monitor your results over time and make adjustments when
needed.
In conclusion
Investment is a plan and as such a plan document such as Budget
should be in place. The Budget or projection would have the
following characteristics of both Personal and corporate wealth-
creation strategy based on specific goals. In Preparing Budget
emphasis of your goals should be:
Be realistic.
Establish time frames.
Devise and revise a plan.
Be flexible; goals can change.