, Component 1: Investment Concepts
GAMBLING- No knowl. Of outcome of decision
INVESTMENT SPECULATION
)
1 . TERM Long term (Eyrs + Short term (1-2yrs)
.
2 MOTIVE Reg reasonable
. return Rea Considerable
.
return
purchase assets large return in short time
· ·
>
-
↑ in value over time
·
degree of knowledge
reasonable return
>
risky
-
·
Real return :
actual (nominal) return -
expected inflation rate
1 2
. . INVESTMENT OBJECTIVES ("WHY INVEST ? ")
Speculation
·
>
-
purchase asset wl
purpose of
selling it win short time period at a considerable
profit
>
high risk asset value ↓ over S-7
-
:
·
Income
>
-
buy asset wh aim to generate income * WI = With
>
-
popular wl retirees -
no
salary as income
Capital growth
·
>
-
implies thatO G investment
eventually I
reason the
protect purchasing power of capital
>
-
:
)
↳
capital growth that will at least inflation rate
try to obtain a
present
=
·
Take-overs + mergers
·
Obtain control over raw material /distribution channel
GAMBLING- No knowl. Of outcome of decision
INVESTMENT SPECULATION
)
1 . TERM Long term (Eyrs + Short term (1-2yrs)
.
2 MOTIVE Reg reasonable
. return Rea Considerable
.
return
purchase assets large return in short time
· ·
>
-
↑ in value over time
·
degree of knowledge
reasonable return
>
risky
-
·
Real return :
actual (nominal) return -
expected inflation rate
1 2
. . INVESTMENT OBJECTIVES ("WHY INVEST ? ")
Speculation
·
>
-
purchase asset wl
purpose of
selling it win short time period at a considerable
profit
>
high risk asset value ↓ over S-7
-
:
·
Income
>
-
buy asset wh aim to generate income * WI = With
>
-
popular wl retirees -
no
salary as income
Capital growth
·
>
-
implies thatO G investment
eventually I
reason the
protect purchasing power of capital
>
-
:
)
↳
capital growth that will at least inflation rate
try to obtain a
present
=
·
Take-overs + mergers
·
Obtain control over raw material /distribution channel
