Possibility to Make Equity Investments †Free Samples to Students

Question: Discuss about the Possibility to Make Equity Investments. Answer: Introduction: There are several factors, which investors should consider while investing in managed funds among which the most important factor is the risk taking and the return-earning propensity of the investor. The investors before investing in any particular managed fund should check the type of fund. They should find out whether the fund manager or the fund management company is going to invest in secured, unsecured assets or mixed assets. The secured assets are prone to lower market volatility and can give more secured return. They include assets like certificate of deposits, bond funds or money market funds. These assets are secured but give lower rate of return. For example, a treasury bond in Australia coded as GSBA18 yields 5.5 percent semi-annually. This means if an investor invests $50000 he would get an interest of $1375 half yearly or $ 2750 annually on flat rate (ASX mFund. 2017). The unsecured assets consist of shares, which are prone to high market risks. They are good investment options if the propensities of the investor to take risks are high because they give high returns. For example, the market price of a share of Telstra is $3.52 as on October 13, 2017 at 4.10 pm and can give dividend of 8.81 percent annually. Thus, an investor would earn a dividend of $ 4405 on investing $50000, which is greater than the interest of $ 2750 yielded by the Australian bond (Bloomberg.com. 2017). The third investment asset, which an investor can opt for, is a combination of both secured and unsecured or mixed asset funds. This would allow the investor to balance his risk and enhance his return. He can invest a portion of his investment in bonds which would yield him secure returns and the other portion in shares which would give him more returns (Cholakova and Clarysse 2015). References: ASX mFund. 2017.Factors to consider when choosing a managed fund. [online] Available at: https://www.asx.com.au/mfund/news/factors-to-consider-when-choosing-a-managed-fund.htm [Accessed 15 Oct. 2017]. Bloomberg.com. 2017.TLS:ASE Stock Quote - Telstra Corp Ltd. [online] Available at: https://www.bloomberg.com/quote/TLS:AU [Accessed 15 Oct. 2017]. Cholakova, M. and Clarysse, B., 2015. Does the possibility to make equity investments in crowdfunding projects crowd out reward?based investments?.Entrepreneurship Theory and Practice,39(1), pp.145-172.