Unit 3 Db for Financial Management

1. Discuss the nature of stock as an investment. Do most stockholders play large roles in the management of the firms in which they invest? Why or Why not?

• Cons – Putting all the eggs in one basket can be risky for small-time investing. Also finding such exceptional investment opportunities is much easier said than done.

‘Investors who hold their stock for a minimum of 15 years are more likely to succeed in the market.’ (Global Finance Journal Index Volume 14, 2003,) Stocks are long-term investments. But there are no guarantees of any profit return and often losses can occur.

However, it is wrong to assume that the main difference between small and large companies is how much money they have. Large and small companies play very different roles in the national economy and in the minds of investors. The very large companies really are different than their smaller brethren, and not just because they have more money.

Accumulating wealth is an important challenge for every adult. There are many sound reasons why individuals should take this task seriously. Financial independence is the best way to face an uncertain future with tranquility and optimism. Everyone can be affected by unforeseen expenses like medical emergencies or the unexpected loss of a job. Besides all this, people want to enjoy the beauty of life during retirement without having to worry about how to cover daily expenses. In order to do so, there are numerous ways to success. Among these, the stock market is an interesting investment alternative to save money and accumulate wealth. According to Bankrate’s Money Pulse Survey 48% of American adults have money in the stocks. Other respondents also expressed the desire to invest in the stock market, but think that they do not have the financial means to do so (CNN Money, 2015). This suggests that a large proportion of American have the desire to earn a return from stock market investments.

According to Ferrell and Hirt (1996), the small business ownership advantages are having an independence, it only requires small capital to start and maintain the business, it adopts easily to changing market demands, it can only focus to its customers and it has a reputation for its service and quality. High stress level for its owner is the disadvantage of small business ownership.

Throughout the past century, many have invested in the stock market with the hopes of making a profit. Going into this project, I was not very familiar with the stock market and how it works. Initially, I had known that the stock market was quite risky; however, I also recognized the fact that there is great potential to make a significant profit. I decided to invest in stocks that I thought would earn me the most money the fastest. I decided to use this tactic because I knew in advance that I had a deadline for this project, and I wanted to maximize my profits to my full potential. To my surprise, the companies that I had thought would do well did not perform as well as anticipated. I feel that part of the reason for this was because I

Investing in the market or different ventures are an opportunity for many American citizens to acquire wealth, separate from the income earned from a salaried job. Regardless of whether an individual has $10,000 or $1 million, there are opportunities to invest in a range of sources where returns on investments can be either in the long-term or short-term. There is opportunity to invest in traditional sources like Gold or recent popular stocks such as Facebook, Instagram, and Snapchat. In those cases the returns were ten fold and the original investors believe in the success of the product in the long-term. Individuals who chose not to invest but to sell products to make a secondary source of income. However, there are major risks when involved

In closing, stock market investing is a risky endeavor. But, it should not be complicated by people like Bernard Madoff. Furthermore, one should develop a sense of doubt when someone makes promises that are obviously

Another tip is to avoid low-priced, highly speculative stocks, states Deporre. Many new investors make the mistake of wanting to buy 1,000 shares of high-risk, low-priced stocks than owning fewer shares in bigger companies with low-risk. New investors should keep their investments simple by putting a few eggs in one basket and focus their attention on that basket.

I do agree with companies should not be too small, but not too big either. Small companies do not do as well as larger companies. Larger companies overpower smaller companies though. A company should be medium sized and should allow everyone to help and give opinions. The smaller the company the more likely for it to fail. Depending on the city a small company might not last long if it is surrounded by larger corporate companies. Larger companies are taking over the world. Smaller companies do not even have the chance to grow or become popular, because bigger companies have taken

Currently, less than 48% of adults in the United State have savings invested in stocks, one of the best potential options to accumulate funds for an emergency or retirement. Various options do exist, however, to aid an individual uncomfortable with investing. A passive investor could utilize a broker, a broker is a representative who buys and sells investments on behalf of an individual. However, brokers can be quite expenses to engage as they receive commissions on each buy or sell transaction they execute. Using a broker has other potential drawbacks, an unscrupulous broker may engage in excessive trading to line their pockets with commissions, in a practice known as churning. In addition, a broker may steer you towards investments that are in the brokerage firms' best interest, not yours. A potentially less risky option available for investing is to work with an advisor. An advisor provides recommendations, generally do not receive commissions, but receive compensation on a percentage of invested assets. Many excellent firms will provide investment advisory services, but these services often entail a range of fees. The median fee range is, .50% for high net worth clients to 1.50% for clients with smaller account balances on top of hourly fees. Herein lies the bad news for

Coming into the is assignment I knew a few things about the stock market such as when it opens and closes,to always buy low and sell high. I knew there was trading fees but this game did not include it into the trades. I had a few stocks in mind that

Stocks can be bought by almost anyone with a job who saves money regularly, even a child could be able to buy and invest in stocks with his or her allowance (Doc 2). Which means there will be a lot of people in the Stock Speculation. The more people there are, the higher the prices will get which means you will literally make zero profit. When buying the stocks, their prices may have increased greatly due to the amount of people and you could be losing money by buying it. It is why Stock Speculation is very dangerous and could cause you to lose tons of

There is a sense of complexity today that has led many to believe the individual investor has little chance of competing with professional brokers and investment firms. However, Malkiel states this is a major misconception as he explains in his book “A Random Walk Down Wall Street”. What does a random walk mean? The random walk means in terms of the stock market that, “short term changes in stock prices cannot be predicted”. So how does a rational investor determine which stocks to purchase to maximize returns? Chapter 1 begins by defining and determining the difference in investing and speculating. Investing defined by Malkiel is the method of “purchasing assets to gain profit in the form of reasonably