Question

Research on this topic and at least 2 paragraph

Investing Fundamentals

Answer 1

The fundamentals of investing constitutes all those decisions which let us to do investment in various kinds of assets whether short-term or long-term with the expectations that its value will increase and provide us profits. The other fundamentals of investing are :

1. Recognition of risk : While we invest in any asset we take up risk because the value of the asset could rise or decrease. If a investor is keen to have profits, he also prepared to take up the loss.
2. Definite target : When a investor invests, it sets a target towards the appreciation of the value of the asset. No sooner the target is achieved, the investor square up the investment made and take home the profit so made.
3. Term of investment : The term of the investment is always very important because highly risky assets has to be disposed of in short term and a safe investment should be carried for a long term so that the targets are achieved to the full.
4. Allocation of assets under investment portfolio : the investor has to allocate the assets according to the percentage of risk it has to observe in relation to a asset.
5. Diversification plays a vital role : The investors should not put all eggs in the same basket or do investment in a single asset. He should diverse according to the importance of the asset and the quantum of the risk which it can avail.

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