Economics Choices
By: Isaac • Essay • 3,145 Words • June 4, 2013 • 1,552 Views
Economics Choices
Contents Page:
1. Managed Funds
a. Risks
b. Yield
c. Liquidity
d. Costs and Difficulty of Management
e. Articles
2. Gold
a. Risks
b. Yield
c. Liquidity
d. Costs and Difficulty of Management
e. Articles
3. Fine Wines
a. Risks
b. Yield
c. Liquidity
d. Costs and Difficulty of Management
e. Articles
4. Government Bonds
a. Risks
b. Yield
c. Liquidity
d. Costs and Difficulty of Management
e. Articles
5. Blue Chip Shares
a. Risks
b. Yield
c. Liquidity
d. Costs and Difficulty of Management
e. Articles
6. Personal Choice
a. Table
Introduction:
Investment is defined as the action or process of buying something as it may be valuable or useful in the future. This report is designed to give investors the best 5-10 year investments with 20,000 dollars. In it there will be 5 investment strategies, these include
• Government Bonds
• Mutual Funds
• Gold
• Fine Wine
• Blue Chip Shares
They will be rated on their
• Risks: the chance that macroeconomic conditions like exchange rates, government regulation, or political stability will affect an investment, usually one in a foreign country.
• Yield: Yield refers to the cash return to the owner of a security or investment.
• Liquidity: Liquidity is how long it takes to sell an investment at or near its value.
• Costs: Costs are fees charged by financial companies in the sale and purchase of securities. They can also be the costs of storing investments properly.
• Difficulty of Management: This is how difficult managing each investment can be, whether it can be handled by the individual or needs professional experience.
1. Managed Funds:
A managed fund is this, it is a fund run by an agent on the behalf of an investor. Managed Funds such as Listed Investment Companies (LICs) have been traded on the Australian Stock Exchange for years. Managed funds help provide exposure to a professionally diversified and managed portfolio. These portfolios can contain many different kinds of investments such as wine, gold, international shares, fixed income securities, unlisted private companies and specialist sectors. Importantly managed funds can be bought and sold on the ASX the same as any other share (ASX, about managed funds). Investors do own a proportion of the investment portfolio equal to the size of their investment and are entitled to any profits and distributions as well as losses if the portfolio's value declines. There are three predominantly traded Managed Funds on the ASX; these are LICs, Listed Investment Trusts (LITs) and Absolute Return Funds (ARFs). In this report we will be focusing on ARFs.
a. Risks:
To assess the risk of ARFs there is no simple answer, some techniques such as aggressive short positions can bring higher risk but then they can also be used to moderate risk if used at an appropriate level. To assess the risks it is good to look at whether the fund invests in shares or bonds, if it is investing in shares it is going to carry a higher risk then a fund that invests in Bonds. However a diversified fund with investments on low-yield