INVESTMENT PORTFOLIO

Investment Portfolio



Investment Portfolio

The purpose of this assignment is to invest £ 100?000 by forming a portfolio. Firstly? I have discussed the general investment trends and environments and than shown how I made portfolio and invested £50?000 in order to generate maximum profits. Asset allocation is based on the incontrovertible truth that a portfolio needs to be structured on the basis that no one can predict the future. A colleague of mine predicted that the S&P 500 would be up about 17% in 2008. He is now rationalizing his inaccuracy by blaming the sub-prime mess. "If it hadn't been for that? I probably would have been right."

Asset Allocation Strategy Utilizing Mutual Funds

To begin with? investors should decide on a strategy for allocating their assets. My choice is to use mutual funds. This way we can identify the best manager for any particular category. Do not use index funds. Index funds are glorified traps in down markets. They are not actively managed? so no one is there to save the investor in down markets. There is an active manager that is superior to any index fund.

Keep in mind? before Socrates drank the poison he taught everyone how important it is to "Know Thyself." Investors must examine themselves for three important issues. First? what are the goals? Is it to buy new businesses? To contribute to charities? To fund a very comfortable retirement? Second? how much time does the investor have to accomplish those goals?

Volume- and price-based capital controls were key features of the macroeconomic stability achieved by South Korea? Japan? and Brazil during their most successful periods of economic growth. In the view of some economists? capital controls remain a necessary and viable policy tool for emerging economies. Capital controls reduce the ability of investors to flee whenever a government pursues a policy of which they don't approve. In such cases? capital controls augment policy autonomy and state capacity. More germane to the present discussion? they also reduce macroeconomic instability by damping capital inflows and outflows.

Many progressive economists and some important organizations like the United Nations Conference on Trade and Development have also proposed adapting economist James Tobin's proposal for a uniform global transactions tax on foreign currency trading. The Tobin tax is primarily intended to address the problem of foreign exchange market volatility caused by speculation in this market. This approach could also be adapted to offset the instability associated with international PI flows. Short-term traders fleeing assets denominated in a country's currency could be charged a substantially higher tax on their currency trading. This modified Tobin tax would offset some of the extreme liquidity associated with PI? reduce the profitability of country-to-country transfers in international investment portfolios? and thereby provide developing countries with greater financial stability.

Relying on market incentives such as a Tobin tax represents a simple policy tool for lengthening the time horizon of international PI. It would provide new pools of finance that could be targeted to developing countries to compensate those harmed by ...