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Menampilkan postingan dari Januari, 2004

Determining What Kind of Investor You Are (Part 2)

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A Professional’s suggestions on How to invest for your character 
How does an investor balance his or her portfolio with the risks?
Richard Flax, chief investment officer at Moneyfarm, suggests: ‘We will adjust the contents of the portfolio according to the investor profile. That essentially requires adjusting the values of higher risk assets (such as, equities and commodities) and lower risk assets (including, government bonds and cash).
The risk exposure in an asset changes according to how a client responds to risk, allowing a target level suitable for every profile.
Any investment approach must look forward and backward, considering various risk metrics, such as volatility and drawdown, and creating portfolios founded on projected gains and past risk parameters.
Why diversification and time are important
Investors need to diversify but must avoid being overly diversified. Many people in the UK invest in a single stock or just a few stocks, depending only on a few firms and experie…

Determining What Kind of Investor You Are (Part 1)

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Many investors have no idea of what kind of investor they are. Instead of dealing with the question early on, they plod along with no idea what they are and what they are doing wrong.
This question is vital in finding out what your goals are, how you handle risk and how you respond to gaining or losing money – factors that greatly impact your investments.
Understanding these factors will help you avoid errors in choosing your investments. This will not only spare you from going through restless nights due to taking so much risk but also from losing bright opportunities to gain significant wealth.
Let us look at five various kinds of investor to help you appreciate the importance of this matter.
The conservative investor
The conservative investor is one who takes great effort in charting his or her course and safeguarding his money. Such type is a safe player, always concerned about gaining a better gain compared to merely holding on to cash; although this individual is content with be…

Six Tips on Effective Long-term Investment

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Keeping your money in bank savings accounts at present will produce negligible interest rates. Hence, leaving all your money in banks may give you considerable safety but not much growth. On the other hand, investing your money in stocks may bring higher returns; but the risks are much higher. And you could actually lose part or all your money at times. 

Try these few easy rules to help you remain strong in the market and gain big returns through a large long-term stock portfolio:
1. Spread your investment. Diversification distributes your risks through a number of stocks in various markets as well as in bonds, mutual funds and other instruments. Follow a rule of thumb such that each instrument or stock should not be more than 10% of your entire portfolio. Likewise, try to invest in diverse national regions, Asia, Europe, US and rising new markets areas. Also invest into hedge funds, commodity funds and property funds. This strategy provides a safeguard against any failure in any speci…