UNIT 3 DISCUSSION BOARD Essay Example | Topics and Well Written Essays - 500 words

UNIT 3 DISCUSSION BOARD - Essay Example Many argue that doing investment on stock market exchange is a profitable business but only by organization that trade large volumes of securities such as banks, mutual funds, insurance companies, pension funds, college endowment funds, etc. can win. One must not finally close doors and make some consideration by taking risk-return evaluation. The relationship between risk and return is one of the essential concepts to understand when investing—and it is  unique for every investor. While some investors may be willing to withstand a higher level of market volatility, others prefer a more conservative approach.   What is crucial to understands is your risk profile and how  it translates into a disciplined approach to investing. Risk, generally equated with the potential of an investment to generate financial loss, is a point to consider when engaging investments. Return is the usual measure of performance. As investments that offer higher potential for total return generally carry a higher potential for risk, informed investors do not simply seek to maximize returns. Instead, they focus on risk-adjusted returns, that is, the potential  returns that correspond to the level of risk with which they are comfortable. Risk tolerance is highly individual, based on a mix of subjective traits and objective circumstances. Your personal risk tolerance can be influenced by current world events, your own investment experiences—even your inherited views on saving and investing. To help you make suitable investment decisions, it is important that you work with a financial advisor who understands your ability to tolerate risk as well as the factors that affect your decisions. A financial plan is a great starting point. Your financial advisor can work with you to create a ample plan that addresses your long-term goals, while keeping in mind your short-range