Personal Finance Unit 4

1. to preclude the company from trading out of its temporary insolvency, thus resulting in creditors not being fully paid in respect of their debt; and

Several key elements of Miller’s contrarian strategy included: 1) buy low-price, high intrinsic-value stocks; 2) take heart in pessimistic markets; 3) remember that the lowest average cost wins; 4) be wary of valuation illusions; 5) take the long view; 6) look for cyclical and secular underpricing; 7) buy low-expectation stocks; 8) take risks.

In this assignment you will demonstrate your understanding of capital investment techniques by evaluating the following three case studies.

The superior risk involves possible losses. The prospect of one of the aforementioned items depreciating in value remains to be relevant whether slim or not. Although there are many who have marginal potential loss mounted on them like properties, silver investment would be the only items without any loss recorded whatsoever.

A stock market is also known as an equity market. A market is an open market for the trading of company-held stock as well as their derivatives at a consented price. It is a large network of several thousands of money-making transactions. It does not have a physical existence as an entity. But at one fell swoop the stocks are listed on an actually accessible unit known as the stock exchange.

Mutual funds combine the savings of a large number of investors and manage them as a single pool of money. Instead of investors worrying about what stock or bond or commodity to invest in, professional fund managers do the job. Mutual funds are run by mutual fund companies, also as Asset Management Companies (AMCs). Each AMC operates a number of fund schemes that suit different type of investment needs.

Nasdaq is a highly computerized system which handles the trade of stocks between buyers and sellers and to set the opening and closing prices. The stocks traded in Nasdaq are less rigid than NYSE. Nasdaq follows 2 types of orders, market order and limit order. Limit order is the one where the buyer or seller is not willing to buy or sell below or above the limit respectively. Market order refers to when the person is willing to accept whichever price the dealer is holding the inventory. Here, the market maker compete with each and quote their best price, they buy or sell at publicly quoted

‘the possibility that an IPO issuer fails to sell a certain number of shares to investors at the offering price’

RISK LIQUIDITY TIME HORIZON MANAGEMENT BURDEN, EXPERTISE AMOUNT OF FUNDS AVAILABLE FOR INVESTMENT (SIZE) CAPITAL CONSTRAINT Therefore (again), . . . What?

No-Load Funds are funds that carry a fixed expense ratio and don’t have any extra charges that account for commission because they don’t pay any. These funds are typically not sold by brokers and are more commonly used in a fee-only advisory setting.

Initial Public Offering (IPO), also sometimes simply referred to as a "Public Issue" is the first sale of stock by a private company to the public. Public issues are done by both small as well as large companies seeking capital to expand business. It is also sometimes done by large privately-owned companies looking to become publicly traded.

This is a brief overview of the different vehicles available to utilize when investing. The financial market is where investors trade commodities, stocks, mutual funds, stocks, bonds, and traditional bank accounts which all can accrue interest. The different options provide very different options and different levels of risk. One can invest in something on the conservative side, moderate, or be aggressive. Depending on the type of investor you are depends on the type of investment that meets one’s needs. The word diversification is a vital word which, investing in multiple different stocks, and getting rid of unwanted risk. (Jones 2008). In addition, not being diversified means you are incurring a high risk and, thereby higher volatility. Further, if an investor puts funds into one particular stock or investment, and it loses its entire value, then this investment incurred a significant loss. Whereas, a savvy investor will have been diversified. For example, investing 50k in investing in the stock market, bonds, mutual funds and purchase some real estate, this is the exact meaning of

The only time to actually buy stocks or shares is when the market is open. It is possible to place orders that will be executed once the market is open but it is not possible to buy any stocks or shares after hours. It is also important to know what a stock or share means. Essentially a stock is just a share in a company. A stock or share represents a claim on the company's assets and earnings. This means the better a company does then it is likely the price of a share or stock in that company is going to rise. This is due to the fact that the company is now worth more so in correlation so are the stocks or shares in said company. Another term that might be heard is equity. This is basically a synonym to the word share in this instance. It just represents a percentage or an amount of the company that a shareholder owns. A shareholder is someone who holds stock in a company.

These factors include, but aren’t limited to: The cash rate (or a term deposit, short term bond rate), risks that are involved (Systematic and unsystematic as well as possible risks involved with potential return) and the ability to hedge (to reduce any extensive losses/gains suffered by an individual or an organisation) risks that are associated.

which is better on each attribute. So, the investors needed to make choices depending on what is available and what are his own priority ratings of attribute he wants in his product. The rank preferences of investors were post office, bank deposits, gold, real estate, equity investment and mutual fund.