MONEY MANAGEMENT STOCKS, ETFS, FUNDS

Money Management Stocks, ETFs, Funds



Money Management Stocks, ETFs, funds

Introduction

Portfolio investment is the investment made ??by the purchase of securities or it is the set of financial assets in which the investor invests for future profit. An investment portfolio generally consists of a combination of some instruments that are fixed income and equities, in order to balance the risk. According to researchers and analyst, a good distribution of the investment portfolio spreads the risk across different financial instruments such as: shares, term deposits, cash, currencies, bonds, real estate, mutual funds and others. This is known as diversifying the investment portfolio. The intention f the investor to invest in different securities is due to the diversification of risk.

In this paper, we will the discuss investment in the share, the reason for choosing each investment and need for diversifying the portfolio.

Discussion

EFT (Exchange Traded Fund) investment vehicle will be used to in order to reflect my portfolio. ETF refers to a commodity, a security that tracks an index or a basket of assets for example an index fund. ETF trades like a stock on in an exchange market.  We can see a change in prices of ETF's throughout the day as their prices are determined by the market forces through buying and selling. I will formulate a strategy will focus on building a diversified portfolio of ETFs, with an aim to build my own “education fund”, and ensure the kids will get a secure future and high education. The only income I have is my salary income.

I will be focusing on long term and short term investment and the amount to be allocated is $500.00. My basket of investment will contain cash, bonds, stocks, and commodities. These diversified opportunities will help me to focus on my long term and short term benefits. The short term will help me with the liquidity problem which can help me to pay off my short term liabilities and help me with my necessities of life. For the long term it will help me to secure my children's by creating my own education fund. For this said reason, I have chosen a balanced profile that will base on various investments I am eager to do while making an Education Fund.

The main reason of selecting ETF is due to its flexible nature, immediate access to the market cost effectiveness and above all transparency and low cost. Majority of ETFs are submissive investments therefore it will be easy for me to start investing without a mediator, which will help me to save the money which is most of the times given to the mediator for helping in the investment. Saving my capital will be an eventual saving for me.

1. Asset Management

Asset Allocation

Investment Vehicles

Initial Investment

After 3 Months

Top -up

Revised Portfolio

A) Cash

10%

$ 50.00

20%

$102.00 $ 3,500.00

20%

$131.00

B) Bonds

35%

$175.00

40%

$204.00 $ 3,000.00

40%

$207.00

C) Shares - ETF

35%

$175.00

25%

$127.50 $ 3,000.00

25%

$105.00

D) Shares - Fund

15%

$ 75.00

10%

$ ...