Investment Case Study

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For most investment manager, when they try to invest a certain asset or investment, they need to consider lots of uncertain factors. All of those factors may finally influence on the returns of the investment. According to this, investment managers need to classify those factors and they need to distinct which one will bring the positive influences and which one will bring negative influences. A sophisticated investor should minimize the risks and enlarge the profits, so that they need to put the different risks into different contents and give the right solutions to control the effects of the risks since different risks may have different characteristics. Thus it is easy for managers to come up with the ideas to fix those problems. This paper …show more content…

Systematic risks usually can be avoided through the technical conducting. At present, most investor will put their investment into different portfolio, since it can distributes the risks into different place. Some profits can offset the lost occurs in another places so that majority of people are willing to avoid putting all their money on a certain asset. On the other hand, some managers in a big corporation may make some mistakes during they operating their business. Therefore, those mistakes will lead the financial performing on the market become really bad. In order to avoid the situation, investors will invest different assets since it has low chance to meet the situations that all the investment are lost because of the wrong decisions made by the companies. Besides this, there are several other systematical risks, which are common to see on the market. First of all, the interest rate will lead the systematic risks since the interest rate is directly affect on the final profits on the returns. Meanwhile, the inflations rates is another factors which can be called as the systematic risks, because the inflation rate will influence on the final cash received by the investors and the value of returns of investment will less than the value at the beginning. Finally is the investors’ expectation about the overall performance of the economics. Because if the investors think that the future economy development don’t have the positive anticipation they will decrease the investment at present thus the total revenue for the investment will be

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