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Case Study for Investments

In: Business and Management

Submitted By adefreest
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An investor’s portfolio is simply their collection of investment assets. Once the portfolio is established, it is updated by selling existing securities using the proceeds to buy new securities, by investing additional funds to increase the overall size of the portfolio, or by selling securities to decrease the size of the portfolio. Investment assets can be categorized into broad asset classes, such as stocks, bonds, real estate, commodities, and so on. Investors make two types of decisions in constructing their portfolios. The asset allocation decision is the choice among these broad asset classes, while security selection decision is the choice of which particular securities to hold within each asset class. You may choose to invest your savings in safe assets, risky assets or a combination of both. It is important to invest in order to be able to retire in the distant future. The earlier you start investing and the more you invest the more money you will have to be able to retire. Since social security is not a guarantee for many of us in the future, it is now more important than ever to invest and to know how and where to invest your money. There are many of other ways to invest money other than common stock. Since this is the only type Judd knows of, the investment class would be a very good choice for him. Another way to invest your money is bonds. A bond is a security issued by a borrower that obligates the issuer to make specified payment to the holder over a specific period. A coupon bond obligates the issuer to make interest payments called coupon payments over the life of the bond, then to repay the face value at maturity. Another investment vehicle is real estate. Real estate is considered to be a real asset that can make up part of a person’s portfolio. Real assets are land, buildings, and equipment that are used to produce goods and...

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