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Some safe investment options for 2011With the recent turmoil in the Arab world and the rising oil prices it seems today that there are no safe investment options other than buying some gold (which is on its historical highs …). We do feel that our readers will understand the investment options they have so that you will not commit hasty decisions which might cost you dearly. Investment options and in essence investment management are based on several guidelines: • Diversified portfolio: A diversified portfolio is at lesser risk than an undiversified one, because your investments are spread. So, even if one market is not doing well, your other investment may still make you money. A diversified investment portfolio works by acting as a shock absorber when the market falls. You must not keep all your eggs in one basket if you want to make a safe investment. • Risk: The amount of risk you take while making an investment is dubbed as your risk appetite. It is said that higher the risk, greater are your chances of getting a higher return. Usually you can reduce the risk by buying less stocks or buying solid mutual funds. • Time span: This refers to the duration of time for which you make an investment. The safety of your investment is dependent upon several variables such as fluctuation of the market, liabilities and more. You must keep in mind your personal needs for making the investment. You can have a short, medium or long-term investment depending on the above-mentioned factors. Usually in investment management you can use the formula of (100 – Age of the investor) to determine the percentage of stocks (either direct, via ETFs or mutual funds). Please note that all investment options carry certain inherent risk, thus you should adhere to the above guidelines with you are dealing with safe investment management. For proper investment management for 2011 we still believe that well balanced portfolio of stocks and high yield bonds will provide much higher yields than the alternatives, with a lower risk. Therefore, we have decided to increase our stock proportion to around 35% out of the overall portfolio and divided the overall sum into 3 portions where we buy each portion with a gap of at least one week, in order to average the purchase prices. This is it for now, best of luck in your safe investment for 2011. 1 comment to Some safe investment options for 2011 |
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