Personal Investment

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PERSONAL INVESTMENT Personal investment is defined as an individual invest and manage their own financial instrument, such as, stocks, bonds, property and others. This personal investment is in aims of improve the liquidity and efficiency of the equity and capital of the individual. Basically, the individual investors have to develop their own investment plan and framework based on different characteristics of the individual investors. This is because the personal investment is very subjective, whereby it is totally based on the characteristics and the degree of risk tolerance of the individual investors. However, before investing into the financial instruments, the individual investors should develop an investment plan and strategy. This…show more content…
Finally, when the expected return up to 10 percent, it will result an undiversified and higher risk portfolio whereby dependent based on the higher risk financial assets. Second part is the individual investors have to set the investment guidelines and constraints while doing the investment. Investment guidelines are referred as the road map for investment over different stages of the financial life cycle, and also consist of the financial goals and the financial perspectives. After that, the individual investors have to address the investment constraints and take into consideration when managing the investment. Some constraint factors embraced tax consideration, investment duration and liquidity. Third part of investment plan is the investment policy which meant a statement about what will and will not to invest and the way of investing the financial instruments. Firstly, the individual investors have to clear about which classes of financial instruments wanted to accept and invest while what kind of financial assets will be rejected. Second, the investment benchmark which is a hypothetical to show the performance of certain financial asset over the duration. This benchmark also gives a standard comparison between the real investments. Third is the asset allocation basically to examine and determine which financial instruments want to invest and how much want to invest.
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