Essay about Benefits Of The Financial Services Industry Outweigh The Disadvantages

Essay about Benefits Of The Financial Services Industry Outweigh The Disadvantages

Length: 1277 words (3.6 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Investment has become a growing tendency and method for people to deal with their income, while portfolio is an important investment vehicle. In the same time, financial services industry has played a critical part in making investment portfolio available to ordinary people. In this essay, the meaning and functions of portfolio will be analyzed and it will argue the advantages of the financial services industry outweigh the disadvantages.

Firstly, portfolio theory has become an essential strategy in the modern investment market. In general, according to Elton (2011), it is a common situation that each person may possess a portfolio which is combined with real assets such as a vehicle or a house, including financial assets such as stocks and bonds. An investment portfolio is a series of chosen securities for investing purpose. In order to avoid risks or pursue for profits, investors are faced with enormous number of choices. If one is considering structuring an investment portfolio, the alternative composition of various assets seems overwhelming. So how to make a decision and what is a good , even best portfolio are the points in the first part.

As Clark and Kim (2013) said, portfolios are the objects of choice. A great number of information is needed for investors to make a decision because it is smarter to divide the money in different assets instead of concentrating on a specific financial product. Portfolio analysis was created by the Nobel laureate Harry Markowitz in the 1950s, which is a mathematical algorithm at first. This theory requires three statistics:
1. The expected rate of return, , for each investment.
2. The standard deviation of returns, , for each investment.
3. The correlation coefficients, , between all pa...

... middle of paper ...

...he inherent and man-made faults, financial services industry does make it possible for ordinary people to have their own portfolio and manage their income, while more improvements need to be taken.

In summary, portfolio is a wise choice when investors make decisions. And the optimal portfolio for individual investor depends on three key variables, which are the expected rate of return , the expected level of risk and the utility of return for different investors. Furthermore, financial services industry has an indispensable role to play in safeguarding and providing guidance for people’s personal property safety. It is the financial services that makes it accessible for ordinary people to have probability to construct their individual investment portfolio without complete expertise and adequate experience, while some internal drawbacks still need to be noticed.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Induced Abortion: Do the Potential Benefits Outweigh the Detriments and Adverse Effects Presented?

- Abortion, the wilful termination of a pregnancy due to unintended conception, is a highly controversial and personal decision. For that reason, abortion can trigger strong personal responses for the individual experiencing the termination of pregnancy and the nurses associated who must respect the patient rights and autonomy as the standards of ethical nursing practice dictate, regardless of the type of care sought (Simmonds & Likis, 2011, p. 795). There are two main types of induced abortion surgical and medical....   [tags: willful termination of pregnancy]

Better Essays
779 words (2.2 pages)

Essay about Oral Contraceptives : Advantages And Disadvantages

- Oral Contraceptives: Advantages and Disadvantages The increase of teenage demand for birth control pills has provoked a debate. With the common question, “Should teenage girls have access to birth control?” Many argue that birth control should not be available to underage girls due to the side effects present, the risk involved for teenage intimacy, and the connection to a rise of abortions and troubled marriages. However, an analysis of birth control pills proves they should be accessible to teenage girls because they prevent pregnancy and have many health benefits....   [tags: Pregnancy, Birth control]

Better Essays
753 words (2.2 pages)

Essay on Advantages And Disadvantages Of Leveraged

- Advantages and Disadvantages of Leveraged Buyouts Leveraged buyout or LBO by definition is a purchase in which a group of investors borrows money from banks and other institutions to acquire a company (or a division of one), using the assets of the purchased company to guarantee repayment of the loan. Leveraged Buyouts are normally undertaken by private equity firms. Private equity firms have to deal with the investments in the private equity- in other words someones’ own stock (equity is the difference between the value of the assets/interest and the cost of the liabilities of something owned)....   [tags: Leveraged buyout, Private equity]

Better Essays
1375 words (3.9 pages)

Accountancy Profession Is Concerned With The Measurement, Disclosure Or Provision Of Assurance

- Accountancy profession is concerned with the measurement, disclosure or provision of assurance about financial information that helps stakeholders make resource allocation decisions. Accountancy consists of different services such as financial accounting, management accounting, auditing and tax accounting. Each service can be essential to the management of a successful cooperation. Financial accounting, mostly concern with the preparation and reporting of the annual financial statements of the company, allow stakeholders to make important decisions about the company....   [tags: Auditing, Risk, Financial statements]

Better Essays
721 words (2.1 pages)

Net Present Value and Other Investment Criteria Essays

- The purpose of this paper is to explain the importance of net present value along with other investment criteria used in determining the value of business decisions regarding today’s investments for future returns. The paper will define what is meant by net present value and show how managers can use it as an analysis tool to decide if an investment is worth the calculated risk. Also, there will be three methods discussed that managers can use to propose the best financial projects to invest in to increase revenue for its owners....   [tags: corporate profits, financial projects, payback]

Better Essays
1220 words (3.5 pages)

Effectiveness Of Using Inquiry On An Audit Essay

- The article I chose summarize and reviewed this weeks was on the effectiveness of using inquiry as a means to gather evidence during an audit. The effectiveness of using inquiry to gather evidence in an audit is highly disputed among the audit and auditee community. The inquiry tactic has many benefits that come from deviating from the standard scripted questions and check box forms, but along with its benefit there is also a downside due to its personnel intensive nature. (Singleton, 2013) The advantages mentioned in this article that come from the use of inquiry during the audit process include being able to use open ended questions for greater evaluations of the interviewee’s comprehensi...   [tags: Audit, Financial audit, Interview, Auditing]

Better Essays
780 words (2.2 pages)

Do The Benefits Of College Still Outweigh The Costs? Essay

- Abel, Jaison R., and Richard Deitz. "Do The Benefits Of College Still Outweigh The Costs?." Current Issues In Economics & Finance 20.3 (2014): 1-12. Academic Search Complete. Web. 6 Mar. 2016. People who graduated with a college degree still questions whether college was a good investment for them. “Do the Benefits of College Still Outweigh the Costs?” addresses how students who graduated with a college degree are still unemployed and in debt. Furthermore, students have been paying more to attend college and earning less upon graduation....   [tags: Higher education, University, Academic degree]

Better Essays
1914 words (5.5 pages)

Human Spaceflight: The Benefits and the Disadvantages Essay

- As humans our desire to visit space has never ceased, but our scientific advances have so far only allowed manned visits to the moon. There are many political factors that influence the ongoing attempts to engineer space tourism and future missions to Mars, which has been in the works since the twentieth century. High costs and risks involved in spaceflight due to the longevity in space and the effects of cosmic rays have been many of the setbacks in making it a reality. The United States is currently unable to conduct human spaceflight after losing its capability to launch upon the retirement of the space shuttle in 2011....   [tags: missions, health risks, exploration]

Better Essays
870 words (2.5 pages)

Essay on Benefits Of Uk Membership For The European Union Outweigh The Costs

- ”Examine the extent to which the benefits of UK membership in the European Union outweigh the costs” Economic integration is the joining of economic policies between different states/regions. This eliminates tariff and non-tariff barriers to the flow of goods, services and factors of production between the regions. Economic integration has varying levels referred to as trading blocs; these are a form economic integration. A trading bloc is a group of nations that have been made a bilateral or multilateral agreement....   [tags: European Union, International trade, Trade bloc]

Better Essays
1531 words (4.4 pages)

The Benefits in Taking a Gap Year Outweigh the Drawbacks Essay

- “Two roads diverged in a wood, and I took the one less travelled by, and that has made all the difference,” said Robert Frost. The choice of a future career is amongst the most important decisions an individual makes in his or her life. Students take gap years after graduating from high school and before entering college . While it has been a longtime tradition for high school graduates in Europe to take an escape from education, this practice is becoming a popular and accepted custom in the United States....   [tags: improve resumes, vacation from academics]

Better Essays
1375 words (3.9 pages)