Trading investment is growing at a faster rate and the market structure is changing fundamentally such that business people have indicated presence of low frequency trading opportunities (Maureen, 2014). The chances to purchase are not limited but buyers are few and this has tempted most investors to look for fatter gains. Consequently, this has created the need for implimenting smarter ideas inorder to survive in the market. In fact, by adopting business strategies which are appropriate for the better frequency in business world, investors can get reasonable gains. Otherwise most investments involve some degree of risks like the investment in property, fixed interest assets, inflation and equities risks and investors must be willing to risk. Therefore, to succeed the project investors must be in position to identify and control the risks associated with the investment.
Business people need appropriate tools of understanding the dynamics of the market structure. The conventional yearly consequences of expenses and the related costs are very essential in recognizing how expenditures in business tarnsactions matter as period horizons lengthen. This is because most traders view the consequences as modest irrespective of the fact that investment costs are known for damaging investors ways of life. Investments may be made indirectly via intermediaries like the pension funds, brokers, insurance companies and banks. These institutions might pool money obtained from a huge number of clients into funds like the unit trusts so as to perfom huge scale investments. They entails diversification of specific assets with motive of avoiding unproductive and unnecessary risk but many businesses end up failing because of using wrong measurers (Zvi et al., 2014).
For example, with the rising use of advanced technology machines are capable of doing multiple the work that employees used to do and most investors stick to old way of doing things. Of course the argument on whether machines are beneficial to than human labor need to be looked at but no doubts machines bring several benefits. This is due to the fact that machines are perfect than human because they hardly require to rest. Meaning that they could work consistently to produce high valued products with little or no mistakes. For other employers, using machines may help them to make reasonable savings since machines do not ask for over time pension or even salary. Hence, employers can save cash on staff welfare since the business may only require technicians to check wether machines are using correct track(Maureen, 2014).
Business risks are associated with income variance and factors like contribution margin ratio, financial laverage consequences and operation leverage results ought to be considered carefully.These ratio shows the operator whether the incremental gain resulting from a particular transformation of sales has constructive or destructive effects because most businesses use debt to fund their operations (Zvi et al., 2014). This is applied in making judgements on how creating a fund leverage result and in knowing the demerits of raising the returns to the stockholders. In deed managers should analyze business risks by simply studying variations in operating income and sales over a given period and investors can learn this by using better structured methods such as using statistics.
In conclusion, not unless investors recognize how new paradigm come to exist in the market, the adopted marketing strategies may not be effective.Therefore Portfolio traders and managers need to focus on the high frequency business globe via expanding beyond the ancient styles of trading.This might be achieved by embracing modern technology which can perfom work swiftly.
Zvi; Kane, Alex; Marcus, Alan J. McGraw-Hill, B. (2013). Investments (9th ed.). ISBN: 9781308016245.
Maureen O’Hara. (2014).High-Frequency Trading and Its Impact on Markets. Financial Analysts Journal
Volume 70 Number 3.