Investment and Portfolio Management Assignment Example | Topics and Well Written Essays - 4000 words

investment funds and Portfolio vigilance - Assignment ExampleThis research result begin with the statement that investment refers to the current commitment of dollars for a period of time so as to derive future payments that will compensate the investor for-The period for which the money have been committedThe expected rate of inflation during this period of timeCompensation for the risk associated with the investment, i.e. the distrust of future paymentsThe process of selection of investment categories requires analyzing, estimating and evaluating the expected risk return trade-off for the alternative investments available. Investment needs and Financial Plan differs from individual to individual, and changes with respect to the life cycle of the individual. After the investment finality is undertaken by the individual, the major function is to manage the investment portfolio evaluating the performance of the portfolio and updating the portfolio based on the changes in the econ omic environment and the investors needs. The investor has a sum of $100,000 to invest into financial products such as debt, equity, derivatives or cash according to his or her choice. The objective of the portfolio or the investment policy statement is to achieve enormous term growth of capital. In addition to that, the fund aims minimizing risk of capital loss through portfolio diversification. The portfolio will be monitored, analyzed and reported upon over the chosen time horizon. The return of the funds is evaluated relative to S&P 500 index.P 500 index. The strategy of the investor is to buy the stock and hold it for long term or at least three years, in expectation of long term capital appreciation. In localize to mitigate the domestic gloom in the economy, few funds may be invested overseas in order to geographically diversify and earn benefits from emerging and developing markets. Proper diversification will facilitate reduce the overall portfolio risk by spreading stock specific risk