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Investing behavior should be driven by information, analysis, and self-discipline, not by emotion or ‘hunch.’

14. Describe two types of investment accounts that you might use in the future. For each type of account, list at least one reason why the type of account might be useful to you. (2-4 sentences. 2.0 points) Investing in stock in a company is something I may do in the future because I can sell this stock anytime whenever it is at high dollar. Also investing in my money in a bank and allowing them to use my money to make more is something I may also do in the future because this will help the bank and me make more money.

Why do anything at all if you're not going to do it right? The same goes for investing. Take the time to learn all about the process. Learn how to evaluate different stocks, diversify your portfolio and take on the right amount of risk. Put in the effort and you'll see the results.

However, this aversion to risk is unjustified because if you look at the long-term patterns you are far more likely to gain money in blue-chip stocks or mutual funds than you are to lose your earnings over your lifetime.

The stocks I brought were growth stocks, values stocks, and income stock. Investing in growth stock will allow my share within the company to be more profitable, because the companies’ profits are reinvested creating a substantial amount of cash flow within the company. I brought value stock, because there are companies that I believe will be worth investing in for their long-term growth. I could diversify between different companies ranging from most popular to unpopular. Finally yet importantly income stock, which will gradually grow during my time horizon to offset inflations within my stocks. Purchasing these three types of stocks will allow me to split up my initial $100,000 fund into the industries I am going to invest in.

I had the opportunity of listening to a lecture by one of the hosts of “Freakonomics”, a podcast that analyzes the irregularities present in the economy. In Steven Levitt’s lecture, I was given advice to start pursuing my interests early, which led me to apply for a seminar with Morningstar- a company which specializes in fund investing. Like my microeconomics class, this seminar gave me the opportunity of expanding my knowledge in the basic principles. Furthermore, I was also taught the basics of the stock market. Towards the end of the course, my peers and I took a trip to the Morningstar tower, and I was intrigued by the goals that every worker pursued, which was to provide accurate data of which stocks would prove to be good investments.

* Analyze the factors that influence investment decisions at different stages in an investor’s life cycle, and make a recommendation at which stage the average investor should consider financial investments. Provide support for your recommendation.

Given the recent correction, I thought it would be good time to look at how my portfolio is holding up.

Before going into the details, it is always important to follow the proven principles of investing. Be specific about the investment objectives; create a strategy that is easy to follow; diversify across asset classes and within any asset class; stay on track to avoid emotional

But for others, they have invested large sums of money and lost it all. An example of growth investing would be for an investor to invest in some sort of new technology. There is a certain method that growth investors use, there are five different methods that value investors should spend time on. But even though these methods are pretty much set in stone like a mathematical equation, the investor must also compensate for the company 's current situation. This meaning that they cannot just follow this exact process and expect the outcome to be perfect, the investor will have to make some adjustments. The first method is Five-Year Earnings Figures, this method states that before all else, the investor should figure out if the company they’re investing in has been growing in the past, or is based on annual revenue. The second method is Strong Projected Earnings Growth, this method states that a company you’re investing in should have a 10- 12% minimum projected five year growth rate , and if you can find anything higher than 10-12% like 15%, that is more ideal. Next there is Costs and Revenue Control, in short this is finding out how management is maintaining margins and controlling costs and revenues by comparing the company 's current profit margins to its past

If you are a risk taking person and are willing to diversify your investments across multiple sectors, you could be rewarded greatly with great returns even if some of the stocks declined.

According to CNN Money, there are more than 6,000 publicly traded companies; the core of an individual’s stock portfolio should consist of financially strong companies with above-average earnings growth (CNNMoney, n.d). When there are thousands of stocks ready to be purchased, how does a person know what to buy and how much to buy? Knowing what the objective is to invest is a good place to begin, many individuals have retirement in mind; and how to measure or quantify what is most important in investing, such as stock return, growth, price per earnings, industry strength, etc. Even though many have retirement in mind for their future financial plan when investing because investing in stocks takes time, even years to see any type of major growth due to stock market fluctuations. Whereas some individuals may want short term returns; knowing your investing objectives and doing proper research will assist in deciding what options will best suit particular financial goals.

Since Value stocks proved historically more consistent, I would prefer to invest major of my investment in low-valued Value stocks than higher priced Growth stocks. Because the value stocks are expected to rise the stock value in a long term, I would also invest small margin of my investment on high-quality Growth stock. Allocating a portfolio 100% to value stocks is not going to be a consistently winning strategy. So in my Investment portfolio, I would have an eighty-twenty investment on Value and Growth type respectively.

The book, The Four Pillars of Investing, by Paul Bernstein is great guide to investing and how to build a winning portfolio for inexperienced investors. This book offers great tips and lessons without becoming too technical or advanced. Instead, Bernstein tries to explain and teach readers the fundamental concepts so that they can make their own decisions by applying the concepts they’ve learned. Bernstein believes that success in investing is built upon four pillars: knowledge of investment theory, an understanding of the history, understanding the role psychology plays in investing, and an awareness of the business aspects of investing.

I’m a tertiary-educated professional in my mid-twenties with a secure job. My auntie LuLu has left me with $500 000 as an inheritance. However I have to use all of this inheritance for investment at least for a 3 year period. As an investment profile I am a moderate investor who likes to take both low and high risk. In this report I would be applying justification on the four key investment areas which are term deposits, managed funds, property and shares. I will be explain the advantages and disadvantages on these investment areas and how my investment portfolio matches my investment profile.