Personal Finance Concepts – P4 DB Investing or investment is a term used in economics and finance that is closely related to saving or deterring consumption. In order to do investment, the person usually purchases an asset, or makes a deposit in a bank, with a hope to get a future return or a certain interest from it. Although some people consider making investments to be quite risky, in case it is made properly, investing can bring a person a lot of profit. It is also important to understand, that making an investment, or ‘properly invested money’ is not simply depositing money on a savings account. So, why to invest? For all these questions there are many websites and companies that offer a wide range of investment strategies and options. What are the reasons to invest money and why is the investment so important? For example, the website Beginner Money Investing (//www.beginnermoneyinvesting.com), created to help individuals train themselves to put money aside, commit money to earn a financial return or take a business risk, is designed to inform the individuals with all possible risks of making investments and is made to explain the basics of investments, such as the basics of investment companies, the principles of market and stock negotiation, investing in bonds, treasury, government, mortgage-backed securities, corporate & municipal bonds, options, call options, put options and writing options, futures, future contracts, analysis and speculating, and many other important things related to investing.
... and Returns associated with options A lot of investors employ options as tools to mitigate their risk in investment, in other words, they ... like any other investment it has no guarantee of 100 percent return or security. An investor can risk investing huge sum in ... the shape of premium price of an option. For e.g. if an ...
As the investment companies assure, investing is important, as it is the foundation of the individuals future financial level. Investments allow the person to keep the life standard successfully after retiring and to carry out successfully any emergency. As such companies claim, the people nowadays live much longer than in the past, and, logically, need significantly more money to keep on living. The insurance, educational, and medical expenditures are very high. Next, the more the individual is able to save now, the better his future in what having money to recycle refers to (Beginner Money Investing).
Finally, by investing wisely and appropriately, the individual may make his life standards better and increase his future wealth. Similar to this website other websites such as Selecting Investments” (//www.military.com/) explain the basics of selecting investments. According to this web site, once the person decides his asset allocation, he needs to select specific investments for each of the asset classes.
The individual can choose individual stocks or invest in a specific mutual fund that invests in the same type of securities. As it is written there, the vast majority of investors consider mutual funds to be the best possible way, because of low costs, their professional management, as well as diversification. In such a way, mutual funds are less risky than making investments individually. A to Z Investments (//www.atozinvestments.com/) provides the individuals with free practical investments tips and advice with the contributions from investors, financial planners, and financing and loan professionals. Similar to Selecting Investments, it explains the importance of investing, and introduces the idea that investing is not a luxury, but a necessity. Indeed, it is important to have investment goals, as far as all people want to be rich.
... are increasingly linked. Hedge funds which performances often highly dependent on the qualities of individual investment decisions or strategies, as ... investor to save money in tax. Ability to eliminate or significantly reduce unsystematic risk: Investing in commodities does ... Such features include stepped-up death benefit and long-term care insurance. Liquidity: Variable annuity has liquidity risk ...
However, the very idea of becoming rich may seem fantastic for an average family that is trying to survive and struggling just to pay the bills, living from check to check. At the same time, even such a family is able to build if not wealth, but at least make a step-by-step approach to make the dreams come true through properly selected safe investments. Similar to the previous website, A to Z Investments inspires with the idea that investing in the right mutual funds, not saving, can make the person rich. So, how to make an appropriate choice and to select the best investment strategy? Some investment companies, like Vancity (//vancity.com), and Fidelity (www.fidelity.com) help their customers to choose the right investments and to get more from the individuals’ savings. For example, the customer can choose term deposits that guarantee a rate of return over the fixed terms that may range from one to five years. Usually, the rate of return depends on the term, as the longer the term is, the higher the rate of return is. Vancity and Fidelity companies, however, explain, that such type of deposits (term deposits) is the most appropriate, when the individual needs funds in the near future. As it was already mentioned, the mutual funds are better, as they offer the potential for considerably higher rates of return that term deposits or savings accounts.
However, it should be noted that mutual funds are more riskier that term deposits or savings accounts in the short term, and, therefore, they should be considered to be the best choice for long-term investing. In such a way, as we can see, the importance of investment is unquestionable. The only thing to consider is to invest wisely, and by doing this, the individual can accumulate an significant retirement fund without being obliged to dispose a great amount of money. Making investments is much easier than the individual can imagine, and, all that you need it time, amounts of money to deposit in regular periods of time, a return rate for the investments, and a reliable company to trust. The most important part of the successful financial plan is to keep apart a larger amount of money and invest the money reasonably by using a longer period of time. References A to Z Investments. (n.d.).
... , the corporation should invest in the project. The Internal Rate of Return is another technique that is used when evaluating investment proposals. But ... return on stocks and bank deposits. This weakness can be rectified by using the modified internal rate of return which has an ... Global Economy//en.wikipedia.org/wiki/Net_present_value//www.investopedia.com/terms/n/npv.asp
Retrieved January 4, 2008, from //www.atozinvestments.com/ Beginner Money Investing. (n.d.).
Retrieved January 4, 2008, from //www.beginnermoneyinvesting.com Fidelity. (n.d.).
Retrieved January 4, 2008, from www.fidelity.com Selecting Investments. (n.d.).
Retrieved January 4, 2008, from //www.military.com/Finance/content/0,15356,89 465,00.html Vancity. (n.d.).
Retrieved January 4, 2008, from //vancity.com.