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Personal Investment

In: Business and Management

Submitted By PennyChia
Words 706
Pages 3
PERSONAL INVESTMENT
Personal investment is defined as an individual invest and manage their own financial instrument, such as, stocks, bonds, property and others. This personal investment is in aims of improve the liquidity and efficiency of the equity and capital of the individual. Basically, the individual investors have to develop their own investment plan and framework based on different characteristics of the individual investors. This is because the personal investment is very subjective, whereby it is totally based on the characteristics and the degree of risk tolerance of the individual investors. However, before investing into the financial instruments, the individual investors should develop an investment plan and strategy. This investment plan is included the risk tolerance and personal constraints which can related to the allocation of the financial assets. Inside the investment plan, the individual investors also have to state down what will do, what will not do, how to invest and include the investment guidelines. The investment plan also included the investment framework for making wise the investment choices, and also can help the individual investors’ reason through the decisions which may have the major impacts on the future financial goals.
Furthermore, the investment plan also divided into few categories in order to understand more about the personal investment. The first part is risk and return objectives, which meant are depend on the individual investors. This part simply explained that the degree of risk tolerance and the expected return from certain investment. This can help the individual investors to address the asset-allocation decision and the classes of financial assets to invest. Normally, the individual investors have their expected returns in their mind to examine the expected rate of return over certain period of time. There are

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