The second stage of the portfolio

Formation of investment decisions on the inclusion of a portfolio of specific securities is based on: this type of portfolio, availability of an offer individual securities in the market, the valuation and return on individual securities, assessing the level of systematic (market) risk of the security. Evaluating the effectiveness of individual securities is based on comparing the amount of investment expenses, on the one hand, and the sums of money flow back to them - on the other. The basis of current cash flow return on securities are the amount of interest paid to them from time to time (for bonds and other debt securities) and dividends (for stocks and other securities mutual). In the back of the cash flow of securities also include the cost of their implementation after the end of treatment / storage in the portfolio. Securities investor chooses the expected rate of return given the level of investment risk. A conservative investor would prefer the choice of securities with low risk (and, correspondingly, with a low rate of investment return), while an aggressive investor will prefer securities with a high rate of investment return (despite the high level of risk them). Category: Management Operations Commercial Bank | Tags: asset