Life Plan For A Low Risk Investment

This paper will assess my ability to maximize my personal return on investment with an allocation of $1,000,000. The overall goal of this exercise is to obtain the highest return possible within the next 12 months. I am limited to the following asset classes for allocation of all investments:

Decision Making Area 3:Investment Decisions * Table of Articles * Summary of Articles * Observations * Conclusion

This Fund is targeting the following annual return for Limited Partners; class A Shares will have a 5% per annum, plus a limited share of profits, on invested capital. Class B shares will have approximately 10% - 15% per annum. However, these anticipated returns (which is not a guarantee of performance) is based on good faith assumptions

EEC calculated the amount of time involved the anticipation of its cost ($3 million). The timeline in recovering their cost of investment ($2 million) initially for the foundation of this investment any profit made in the future of this investment will be justified as a profit for the company. If EEC can anticipate a fast return on its investment it is a profitable wise decision in making the investment financial, it is considered to be an easier way of formulating investments financially. On the basis of one year all cash flows is added together equal to the sum of $2 million originally invested, then it is divided by the annual cash flow of $500,000. The calculation of the payback period would equal four years. After this time frame any financial proceeds will be considered profitable for the company. I conclude that the timeframe is adequate in comparison of the investment in this worthwhile investment financial venture for the company.

Annual interest rate is guaranteed at 5%, no risk of unstable returns during low interest environment

Our team recognizes Harry’s reminder as a wise disclaimer to provide to the client. Those who are unfamiliar with the portfolio management rely on past performing capital generators and hope for the identical result. Harry is making sure that the client understands that the market is volatile and is unpredictable. With 60% of the assets allocated to equities in a small-mid cap fund, a great deal of fluctuation can take place during the accumulation period. Harry wants to ensure the portion allocated in this market is tracked carefully and ensure major losses are avoided. Harry must include a statement that assists the client in understanding how the growth in their portfolio can fluctuate. Often times, clients are blinded by short term results. Harry’s Job is to ease the emotions of the clients and act in a way that has their best interest to achieve their financial goal. With the Robinson’s goal in mind, harry must not only consider the fiduciary standards when it comes to investment advice, but build on the foundation the Robinson’s are looking to

The funds asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. This investment is superb for long-term investors like myself.

As capital markets analysts, it is our sole duty to ensure the happiness of our clients and investors through rigorous financial models of a particular company’s stock for the purpose of forecasting its future trends, and ultimately leading to a recommendation of whether that particular stock should be bought or sold. In the general sense, a successful long-term investment strategy involves the following characteristics: selecting a comprehensible investment, investing early and taking appropriate risks, establishing a cash-flow plan, making stocks the central focus while also taking into account diversification, and achieving an effective balance by investing in bond funds for a safety net. It is also imperative to use tax advantaged investment

The historical roots on Return on Investments (ROI) have an extensive historical background which involves the Du Pont system. It is significant to illustrate the major history behind the Return on Investments (ROI) and how the Du Pont system started. The purpose of the Return on Investment (ROI) is to evaluate the efficiency of an investment or compare the efficiency of various investments. In addition to (ROI) share the common class of profitability ratios. Several examples will show how Return on Investments (ROI) and the Du Pont system has established life-long formulas to help indicate growth or decline on financial investments.

If you’re a homeowner, and you have a long-term financial plan, you should include a strategy to pay your mortgage off early. If you can, you’ll have more money each month to payoff non-housing debt, or to build up long-term savings to fund your children’s college education, or to prepare for your retirement. And speaking of retirement, you’ll want your mortgage gone by the time that day arrives, that way you won’t need nearly as much income and your retirement portfolio will last much longer.

High Tech and Collections are two other investment alternatives for the client. The expected rate of return is 12.4% for investing in High Tech and 1.0% for Collections. Investors might choose to invest in one of these two depending on how well they predict the economy will do. High Tech has a direct relationship with the movement of the economy. If the market is expected to increase, then this would be a good investment. Collections, however, moves in the opposite direction of the economy. If a decline is expected, then investors would use this as a hedge against the negative movement of the economy.

Volatility is main important variable in finance. Its appears mainly in pricing, portfolio theory ,risk management , derivatives , business finance , investment valuation and financial econometrics. Volatility cannot be directly observed. Hedging volatility risk is main for investors fluctuating from individuals to pension funds. Volatility risk followed the 1987 crash. Example: Barings Bank , Long Term Capital Management. In Hedging volatility risk there are three issue. First, a strong volatility measure has to be specified. Second, the properties of this particular measure have to be modeled. Third, the suitable instrument should be priced.

However, Market values may be exposed to economic fluctuations which may cause assets/liabilities to be under or over valued.

“DOES FII’S INCREASES STOCK MARKET VOLATILITY” Section : A Semester : 2 Batch : 2008-2010 STUDENT NAMES & ROLL NO:

In 2012, the same investing plan was proposed again, just like 14 years most people still reject or doubt at such plan. But at this time, the government accepted the proposal and made a realistic schedule for it because the situation of pension was worse than 14 years ago. In the government schedule, they will invest 30% of pension insurance into stock and stock bond, the totally amount is about 600 billion.