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What influences investment decisionsBY: money | Category: Business and Finance | Post Date: 2009-06-06
Each and every person can be specifically differentiated on various parameters. Their investment decisions depend on the various attributes. There are so many factors that influence their investment decisions. Everyone has their own requirements. So, accordingly they take decisions. Any investment is made with the primary objective of earning returns on the invested sum. Based on the type of investment instruments, returns can vary. The returns can be of two types, repetitive cash receipts, capital gain or loss. The gain or loss of capital makes the difference between the purchase price and the selling price of the security. The total return on any instrument should be calculated by adding all cash receipts to the change in price of that instrument over a period of time divided by the purchase price of that instrument. The more you are ready to take risk, the more the return an investor can get. Depending on the degree of risk an individual can take, he/she can be classified as a risk taker, risk averter or indifferent towards risk. Risk takers usually prefer to invest in risky securities like shares and risk averters invest in risk free securities. Duration is also an important aspect for investment. The time duration of investment can vary from a few hours to few months or even several years. Short term investments are usually considered to be less risky in comparison to long term investments. But, in stock markets long term investment is less risky. Personal investment is affected by the level of knowledge an individual investor possesses about different investment instruments. The knowledge of the relationship between risk and return along with the knowledge of industrial sectors, economic indicators, companies performance analysis techniques, portfolio management techniques, etc., affect the investment decisions of individuals. The sources of information regarding investment avenues also guide the investment decisions. Tax liabilities of an individual and the effect of taxation on the income generated from investment along with its understanding influences an individual's investment decisions. Security or safety is also very important in investing. Because, if someone is going to invest their hard money then definitely he will expect good returns. The safety of the funds invested should be the first priority of any investment and then the returns should be in proportion to the level of risk taken. One of the most important factors affecting personal investments is the availability of disposable funds. If the difference between net income and expenditure is either zero or negative, there will be limited amount available for investment. Apart from all these factors invested money should be convertible into cash in the hour of need and this is an important factor which affects personal investments. Article Source: http://www.saching.com About Author / Additional Info: What influences investment decisions was presented by Vishwa. Additional Articles: * Why the English Premier League is Like No Other. By Fahman Rabbani * LIFE AS A HOUSE MAID IN MY OWN HOME * Environmental ethics: From unsustainable to sustainable development * LIFE AS A HOUSE MAID IN MY OWN HOME * Durga puja celebration in West Bengal - Durga pooja festival. Does this article violate or infringe on your copyright ? It is a violation of our terms for authors to submit content which they did not write and claim it as their own. If this article infringes on your copyrights, then use our Contact us form with the detailed proof of infringement along with the offending article's title, URL and writer name. If you do not hear back from us then contact us again in another 10 days. Thank you. Comments on this article: (0 comments so far) * Additional comments are now closed for this article *
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