subject: Stay in Touch with Basics of Investment [print this page] The Present Day situation with Markets Implies Going Back to the Basics
Taking into the account the turmoil with global markets, it's high time we revisited the reasons why we invest and re-consider the goals.
In the last year many investors were abandoned with the bull market and some of their portfolios almost vanished. So, the outcome is that lots of them went for the exit, complaining never to come back. Now, we have reached the point when we need to refocus our allocations that correspond to our initial objectives of investment.
First, consider the various asset classes one might consider. Please remember that not everything is suitable for everyone. Each asset has its own risks and potential rewards so one should seek out professional advice before investing.
First of all, consider the different classes of assets. Just remember, that not all of them fit your investment plan. Each asset has both risks and future awards, that's why you have to find out the advice from professionals before making inputs.
Here are some examples where to invest: Real estate, international fixed-income, hedge funds, commodities, private equity, domestic fixed-income, domestic equities, emerging market equities, international equities and other alternative asset classes.
The above written list doesn't include all the possibilities of investment and it shouldn't terrify you. It's really hard to understand which type of asset class will fit best your goals and your personality too. Putting it another way how much risk, credit and currency is an investor able to consider to reach his aim in the investment. So it's not acceptable for everyone.
The Tendency is in Moving to Active Managers, rather to the Passive ones.
The recent research made by a firm Greenwich Associates, has shown the tendency in the decreasing number of institutional investors that are of passive domestic equity type and in increasing rate of active ones. The gist of such a movement is that active managers are able to make an additional profit.
Investments in Stocks and Bonds
Inputs to domestic fixed-income had the tendency of being cut down and it moved to the active managers at the expenditure of passive ones. The biggest reason for that is that the credit postpones debts and that the active managers are able to add a definite amount of value.
Going Back to the Basics
You have to just keep in mind that if someone else acts his own way, it doesn't imply you are to do the same. The majority of institutional investors own resources that individual ones don't have. Eventually, each investor has to focus on the sources behind the inputs and that an investor is satisfied with his portfolio.
