Investments Flashcards
1
Q
Major asset classes
&
Risks
A
Cash-low risk
Property - moderate/high risk , least liquid
Bonds - moderate IOU
Equities - high
Diversification - spread risk , balance
2
Q
Investment types not too NB
A
Stocks Mutual funds Real estate Savings Life insurance Share market Foreign Bonds
3
Q
Risk Profiling
A
Time horizon of investment Current financial position Investment objectives Risk tolerance ( appropriate asset/investment combination )
4
Q
Criteria used to choose investment option
risk profiling
A
Investment time frame ( recover losses etc )
Funicular position ( total net asset worth , need for income )
Risk&return
Amount of risk prepared to accept based in potential level of expected returns
5
Q
Investment strategies
A
Conservative
Defensive
Balanced
Growth
Strategies to limit losses
- Rebalancing
- Stop-loss
6
Q
Investment opportunities
A
Retirement annuities Pension fund * Endowments Equities * Unit trusts Cash Noice deposits Collectibles Off-shore investments Debentures
7
Q
Equities on the stock market
A
Cost
- brokerage
- marketable securities
- VAT
- strate
EVALUATION OF EQUITIES
- higher returns
- beat inflation
- value shares grow as company expands
- receive dividends
- supply and demand
Risks
- volatile markets
- share prices
- time
- administrative costs
8
Q
Reasons for off-shore investments
A
- diversification
- foreign financial markets may offer better value
- ROI of foreign - price movement + exchange rates , fluctuations
- different investment opportunities
- emigration
- spreads risk
- what foreign asset
9
Q
Investment and taxation
A
Income + dividends tax
Capital gains tax
