Question

1.Marta is a graduate from UCLA and is having funds of $500 000 that she inherited from her dad. What are 5 investment alternatives that she may consider with the resources available to her? Further elaborate as to why these alternatives would be best for her.

B) What possible 5 common errors in investment management should Marta be aware of? Elaborate

Answer 1

1. 5 investment alternative available to her-

A. she can invest in equity shares and equity will be having higher risk and higher Return

B. She can also look for investing debt instrument which have low risk but no return but the return will be uniform

C she can look to invest in cryptocurrency which are highly volatile but they'll offer very high rate of return.

D. She can also look to invest into fixed deposit for a longer period of time which are Highly safe.

E. She can look to invest into precious metals like gold and silver and they can also offer a high rate of return but they are faced with cyclical changes.

2. Five common error in investment management are as follows-

A. Not proper diversification is one of the error is associated with investment

B. not aware of risk tolerance and risk management is another factor which can lead to disastrous results.

C. Being highly involved and not being passive, can also lead to destruction of returns.

D. Not hedging the portfolio at the time of change in economic cycles can also wipe out a lot of return.

E. Buying on too much noise is another factor that can be associated with stock investing and they can lead to lower rate of return.