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Discuss these titles about the ASX: risk and return, aims of investment, considerations for setting up a portfolio, shares & alternative investment. Make reference to the profiles!
Date Submitted: 12/16/2002 00:10:39
The principles of risk and return:
Fundamentally, the greater the return the greater the risk; in other words there is a direct relationship between risk and return. An investor acting in rational self interest would only invest in a speculative investment if the investor is compensated by a greater return. For instance, gambling has the greatest risk attached, and also it potentially has the greatest return. However, government bonds have little to nil risk -
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people who want to obtain the desirable land, thus the price is inflated by demand (demand pull inflation). I would advise all three investors to stay away from many of the obscure investments and stick to main stream ones which are regulated by government bodies such as ASIC. I would also advise them to be careful moving into some areas of the overheated property market at present unless the have considerable knowledge in this area.
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