Economics and Risk Assessment

637 Words3 Pages
Economics_A20101966 Of the many risk profiles that exist, namely: cash profile, conservative profile, moderately conservative profile, growth profile, and high growth profile, I would settle on balanced profile in allocating assets because an investor would want to steadily grow his investment over time (Bailey & Kinerson, 2005). I will be comfortable taking on a greater level of risk to achieve this. With the balanced profile I will be capable of placing more of my investments into growth assets. This will increase the possibility of rises and falls to my investment value. The possibility of a negative return would be very remote with the balanced profile. This type of asset allocation creates a balance between seeking capital for growth and wealth preservation (Bailey & Kinerson, 2005). With the balanced risk profile, an investor accepts the risk in the pursuit of long term gain. With the balanced risk profile an investor seeks reasonable level of returns and accepts a medium level of risk. This kind of asset allocation makes an investor to accept the possibility of losses from time to time while he expects growth in assets over the medium to longer term (Bailey & Kinerson, 2005). With a balanced risk profile an investor will have a balanced allocation between stable "income" investment assets such as cash and fixed interest and their allocation to more volatile growth investments such as shares and property (Bailey & Kinerson, 2005). Balanced risk profile is suitable
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