Essays on Mutual Funds

INVESTING IN THE FUTURE

Question 1: Discuss the role of investing in personal financial planning. It has been gathered from the case that Sam Johnson is a hard working guy and he has defined some financial goals for himself. He is about forty years of age, enjoys a great job and ensures that he pays his bill on time. He plans to retire at the age of sixty and he wishes to have enough savings so that he could send his young kids to college when they grow up. In order to ensure that he has ample amount in his savings before retirement, ...

Discounted cash flow is one of the valuation methods of performance used by a company to pick on a favorable and attractive investment opportunity (Baker and Powell 105). This evaluation analysis method uses future cash flows that are to be discounted to find the estimated present value of the project’s potential to invest. Business evaluation entails a well laid out set procedures employed in the estimation of the owner’s interest economic value in business. Financial market participants use business valuation to arrive at the price they are willing to receive or pay out for the sale of ...

High-risk investments mean volatility associated with the returns on investments and stock prices change. Any investment transaction has a risk element. Moreover, the major proportion of the investment theory states that the potential profitability is inversely proportional to the risk level . At this, it is not important whether it goes about the passive investment, active stock transactions or new business projects. Risk allows earning much and provokes losing much because associated with potential losses even in the case of success. It is extremely important to understand quantitative and qualitative characteristics of risks, which affect the amount of the invested ...

Corse Lecturer

There are big changes that have occurred in the economy over the years. Some positive and others negative. A large number of people now are enlightened on issues related to the economy and are involved in investment. More businesses are growing and resources are continuing to be strained. Greed is common as many people aim to have a large pool of resources at their disposal to grow their businesses as well as finances. There are now many economic vices that are stunting the growth of the economy. This paper will look at some of the economic issues today and ...

Essay Question: How different investor types impacts Market Efficiency

Individual investors When individuals talk regarding marketing efficiency, they simply refer to the degree to which the aggregate decisions of all participants in financial markets are accurately reflecting the value of companies and their shares at any given time (Allen and Gale, 2000, pp. 236-255). Therefore, it requires the determination of the intrinsic value of the company while providing a constant update to valuations because new information is becoming familiar. Consequently, the more a financial market becomes accurate, it will be able to price securities and the more efficient it is said to be. Thus the principle of the ...

Wall Street Journal Essays

Three authors of The Wall Street Journal wrote on 11 December 2015 an article titled "Worried about Your High-Yield Bond Fund? Devise an Exit Strategy", that article is a warning to all individual and corporative investors that have important positions in Mutual Funds with previous performances over 10% in 2014 and 2015. Those mutual funds represent a risk for the current investors that have positions in those high-yield bonds. Those bonds have positions in China and other emerging markets that are slowing their growth for 2016 and affront problems in cash flow and currency depreciation (Maxey, Krouse, and Zweig). ...

Introduction

There are various types of financial instruments including equities, treasury bills, bonds, mutual funds, deposits and cash equivalents. Equities refers to securities that represent ownership in a company and are traded (can be sold and be bought) in the stock markets. They can also be purchased through IPOs; meaning directly buying from a company. Investments in this category are normally considered long term option and have higher returns considering their long term horizon. However, the instrument lo bears high risk. On the other hand, the mutual funds allow groups of investors pool together money that is then professionally managed ...

Investment Goal:

The overall objective of this portfolio is to earn a sustainable return by assuming average level risk over the period of 10 years. The eventual objective of this portfolio is to fund my post –retirement life, however, I am keeping the time horizon here up to 10 years for now as with me still being in a young age, I opt to assume average risk. However, in order to avoid payment of taxes on my cash inflows, I will solely be investing in mutual funds suitable for IRA investment

Investment Style:

Considering my average risk tolerance and investment period of 10 ...

There is ample evidence to show that Socially Responsible Investing (SRI) investments outperform non-SRI investments. A study conducted in China on four of its best SRI funds showed that SRIs perform better than non- SRIs regarding the riskiness of the investment and the corresponding dividends (Zhang, 2014). The investments considered were done in the Biology, pharmaceuticals as well as the food and beverage industries. However, the SRI investments in the finance and insurance sectors unperformed leading the analysts to conclude that SRIs are best done for the Fast Moving Consumer Goods (FMCG) industry. SRIs perform better than non-SRIs when ...