Investment Portfolio Assignment Sample
Introduction
Investment is something where the investors invest in any company, which could give them high profit, and this will lead to maximum profit. As here there is 10,000 dollar which needs to be invested and in such a manner so that there is less of loss if it happens and so maximum of profit. Talking about investment there is an investment based on time also like say for a short period or say for a long time. Mainly people invest in a short time for small profits and also have to bear risk accordingly on the other side talking about long term investment, here you will see ups and downs in the price of the share you have invested and as an investor you should have proper knowledge about the company before you invest in it. Everything depends upon the value of shares you invest so there should be a detailed study about the price of shares of any company and also note down the company’s performance in the previous year (Thuy and Thuy, 2019). There are difficulties while talking about the price and this varies day to day so every time you decide to invest you should look for growth of the company in months not in days because it will not give you proper detail in one day so it is told to look after the records in months.
Discussion
Talking about the risk is an important factor to be kept in mind while investing. If investing huge amounts then it is preferred not to vest in an angel company as if there is loss then you have to bear all the loss if you invest in different companies then you don’t have to worry as you will get the profit from one or the other (Thuy and Thuy, 2019). Risk also depends upon the market and if there is a decline in the market then there will also be a decline in the share invested. Then inflation is also an important thing to keep in mind as there is more money with the public they will invest more in the market and so the supply will be deficient so ultimately the price of the products will rise and this is what is called inflation. So when talking about the investment after the delta study of the market and share of any company is investing in the right company. As the detailed study is done then you should not mind giving your money to the investor to invest and wait for the return. What he is going to charge is .05% of the total profit which is not more.
After the detailed study now we have to look after the investment like in what all companies invest. Here are the names of a few companies I have evaluated and studied. The 1st one is BBA with the value of 2 billion dollars, NIO with the value of 1 billion dollars, Taiwan company with a value of 800 million dollars, JD with the value of 700 million dollars, VALE with a value f 500 million dollars, AZN with vale of 400 million dollars, GFI with the value of 300 million dollars, BNTX with the value of 250 on the dollar, and at last, I have also looked at ASML whose value was 100 million dollars. After going through all the companies and studying the trend I found that there were only a few companies where I could have invested. I invested 4000 dollars in shares in ola company which I studied in detail and what discovery was that this company has a good background in its previous year. And moving forward I studied about real estate and then I discovered that there is something nicer than stock and I decided to invest 3000 dollars in ALLE company which was best as it was the company which did not disappoint me and benefited me the most as it resulted in a good investment plan. Investing publicly is also not a bad choice as there we don’t have to pay any commission and it also has good outcomes so we can rest. . If I want the return within one day then I should look after the company with the least risk as anything can change within a single day and share keeps on changing so it is unpredictable and so you have to choose wisely where to have silky rely on this. I compared all the details of every company in detail before choosing one and then decided to invest in the company which would give the maximum result and benefits me the more. I went on a detailed study of the earning per share of the all companies for the last 5 years and I was confident enough to invest after I researched all the companies. I even went on studying and I discovered that the price earning ratio also matters and it would be low when compared with the different companies in the same field. I even calculated the difference between book ratio as the company with a low ratio was best and further I studied more on this so that I could have chosen the best company for myself. Later on, I went with the trend and was lucky enough to get the best for the client. Also, the study of trends showed me the dividend of the company and this helped me more. I also further went on studying the different companies and their trends and this helped me more and later on my investment was the right choice and was good enough to bring out the best result. Investment refers to how a person puts his money at stack to earn so profit in return for his invested money and risk (Weishäupl, 2017). There is always some risk when it comes to investment and it is unpredictable and nothing can be done when something goes wrong as the amount invested is up to the person so its better if invest at the right place with the right consultation at the right time and was lucky enough to get maximum profit.
Exchange Rate Volatility
Exchange rate volatility is nothing but the risk and while my research I kept in mind that there will be no loss as I invested in several companies so there is a chance of loss but still everything depends upon the market and the trend. I also decided to follow the trend as it is the most important thing which many investors ignore and they have to bear the consequences which later on makes it difficult for them to survive in the market. this gets affected by the change in demand and demand varies based on price. On the other hand, supply also affects it in any manner and it should also be kept in mind while investing. Even currency volatility should be measured and it can be ignored as it depends upon the currency like in dollar, pound, yen, rupees (Sukharev, 2019). There are three types of exchange rate, they are as floating exchange, fixed exchange, and the last is pegged float exchange. The floating exchange rate keeps on changing and its example is the dollar.
According to Omari et al. (2017), there are many risks involved in the process of investment that are equally borne by both the investor and the company. The risk arises from the malfunctioning of the company as well as the behavior of the investor. On the part of the investor, most of the investors are only bother about their profit only and they are least interested in the performance and functioning of the company. Only the equity shareholder bears the maximum loss if there is any fluctuation in the price of the share (Hilorme et al., 2019). Nevertheless, preference shareholder and debenture holder don’t share any losses of the company which may happen due to any reason. On the other hand, the company also plays a vital role in influencing the price of the share. For example, recently Tesla motors have launched their first electric vehicle, therefore, increasing the share value of Tesla motors and making Elon musk the world’s second-richest person. Similarly, the price of the share is highly affected by inter trading in which one of the people of the company secretly surpasses the confidential information of the company the outsider. This trading is illegal but for the sake of making more money in a short time, this trading still exists. At the time of winding of the company preference shareholder and debenture holder are paid first and equity shareholders are paid at the last if any profit/surplus is left.
Being an investor, would invest some of my money in NIFTY 50 top companies and this investment will be long-term. For example in 1960 if a person had invested 10000 rupees in Wipro share, his investment value standing in 2021 is 70000000. There are many such examples like this . the best part of long-term investment is that initially the investment value may decrease due to any reason but in long term, it will be a profitable investment. Many of us have witnessed that the Sensex has fallen drastically in lockdown keeping the Sensex below 13000 seeing this many investors square off their investment but those who hold their investment are in a win situation because after unlock in India the Sensex again crate a history by hitting all-time highest of 45000 (Yoon et al., 2018). People would also invest their money in dollars and commodities. Because the exchange rate of the dollar is increasing day by day on the negative side the value of the dollar decrease slightly which will not affect my whole investment value?
An exchange rate is a rate at which the currency of a different country is exchange. For example, Indian currency 100 rupees will be $1.3. No doubt, the investment portfolio will be affected by the exchange rate. In lockdown, the value of the dollar has decreased and the value was quite low for a longer period creating a loss for the people who don’t have patience in investment (Andrianto and Diputra, 2017). Now we can see that again the value of the dollar has increased. In conclusion according to my viewpoint exchange rate do affect investment portfolios but no on a larger scale if I invest a little amount in commodities and dollars.
Market risk is responsible for affecting the value of investment indirectly. Market risk is a wider term as it includes all the risk which may happen inside the company or the outside the company risk such as demand and supply, change in the test and preference of customers, etc.
In 2016 the CEO of info sis company resigned from his post due to which there is a fall in the price of the Infosys share. Moreover recently Elon musk using his Twitter handle posted #bitcoin this influence a lot of people around the globe and making the value of one bitcoin 4500000. This shows that the value of a share is uncertain as it may rise or may fall depending upon the uncontrollable situation.
As for my recommendation investment in the stock market, no doubt is a profitable decision for only those people who have a thorough knowledge of this market. A person who has no knowledge or little knowledge should invest in equity. They should not go for inter trading.
Conclusion
After the detailed study of the market and companies, every single step should be taken and when it comes to investing then there are several other things, which you need to keep in mind before you take any decision so that there is the best result for you. There should be the proper study of risk also and the calculation should be done properly or else there will be loss and which you cannot afford. Once you go through different companies and the risk then comes the time like for short time or long time because your profit will depend upon this.it is best to invest for a long period as there is low risk and n need to worry as compared to a short time.
References
Hilorme, T., Zamazii, O., Judina, O., Korolenko, R. and Melnikova, Y., 2019. Formation of risk mitigating strategies for the implementation of projects of energy saving technologies. Academy of Strategic Management Journal, 18(3), pp.1-6.
Omari, C.O., Mwita, P.N. and Waititu, A.G., 2017. Modeling USD/KES exchange rate volatility using GARCH models.
Sukharev, O.S., 2019. The restructuring of the investment portfolio: the risk and effect of the emergence of new combinations. Quantitative Finance and Economics, 3(2), pp.390-411.
Thuy, V.N.T. and Thuy, D.T.T., 2019. The impact of exchange rate volatility on exports in Vietnam: A bounds testing approach. Journal of Risk and Financial Management, 12(1), p.6.
Weishäupl, E., 2017, June. Towards a Multi-objective Optimization Model to Support Information Security Investment Decision-making. In Proceedings of the 4th Workshop on Security in Highly Connected IT Systems (pp. 37-42).
Yoon, J., Talluri, S., Yildiz, H. and Ho, W., 2018. Models for supplier selection and risk mitigation: a holistic approach. International Journal of Production Research, 56(10), pp.3636-3661.
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