Prepared By Rasha Anan 120050146 Supervised By Mr. Ibrahim Sammour University of Palestine Faculty...
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Transcript of Prepared By Rasha Anan 120050146 Supervised By Mr. Ibrahim Sammour University of Palestine Faculty...
Prepared ByRasha Anan 120050146
Supervised ByMr. Ibrahim Sammour
University of Palestine Faculty of Finance &Business Administration
DefinitionInvestment Types A Good InvestmentThe 6 Basic Principles of
Successful InvestingTwo Strategies to AvoidInvestment RiskThe Twenty Golden Rules of
Investing
Investment refers to an asset which is purchased with the expectation that it will generate income in the future or its’ value will appreciate in future so that it will be sold at a higher price.
There are usually three participants in an investment:
1.The Issuer2.The Investor3.The Broker
Cash Savings Accounts Debt Instruments Stocks Collectibles Precious Metals Real Estate Investment Portfolio Mutual Fund
Four characteristics should be serve as helpful guidelines in the search for a good investment.
1.What is the price of the entire company?2. Is the company buying back shares?3. What are your reasons for investing in
the company?4. Are you willing to own the stock for the
next ten years?
The 6 Basic Principles of Successful Investing
1. Diversification2. Asset Class Investing3. Asset Allocation4. Rebalancing5. Compounding6. Time
In investing parlance, risk refers to the probability of a monetary loss or actual returns from an investment being lower than the expected returns.
Types of Risks1.Capital risk2.Currency risk3.Liquidity risk
The Twenty Golden Rules of Investing1.Understand the difference between
investing and speculating 2.Do not borrow, do not buy on margin, do
not leverage yourself and do not sell short
3.Decide whether you invest for income or for growth
4.Bet on the challenger, but do not buy at peaks
5.Invest only in stocks quoted in big boards
6. Observe the 5 percent rule about assets at risk
7. Look at homework as a better guide than advice by other experts
8. Learn how to do fundamental analysis and technical analysis
9. Learn how to detect and analyze market trends
10.Never chase the return of shares you did not buy
11.Always listen to contrarian opinion
12.Appreciate the need for rigorous risk management
13.Accept responsibility of your own decisions
14.Never hesitate to cut losses 15.Do damage control through
limits and profit targets
16.Consider flexibility as one of your best friends
17.Use mathematical models, but understand they are not fail-safe1
18.Factor-in the impact of market liquidity and volatility
19.Appreciate the impact of business risk 20.Look at conflicts of interest as part of
daily life