It is also important to consider that convertibles and rights will eventually turn to ordinaries, meaning that those forms of equity do not diversify the risk away from ordinary shares.
Time horizon is another consideration to take into account (No author, 2010). The time horizon of an investment is in part related to the risk of that investment, as some risk is related to time. Also, the investor should be wary of investing in securities with a long time horizon for returns if the investor may have a need for that money in the short-term. The time horizon of the investment should match the time horizon of the investor's needs (Ibid).
Finally, the investor should consider the nature of the investment itself and whether they have a full understanding of how that investment works. The ASX and the two mining companies selected are a perfect example of this. While the ASX is home to many sophisticated exploration and mining investors who can understand adequately understand the risks inherent in investing in these companies, not all investors can. These types of companies in particular produce reports heavy on geological analysis that cannot be understood without a background in geology or extensive experience with mining and exploration stocks. Investing in these companies without understanding the nature of the company's business and the risk factors inherent in this business is a poor investing strategy. Diversification across industries can offset some of this risk, but the individual investment in an unfamiliar industry is little more than a trip to the casino.
If I had 5000 Australian dollars and wanted to resell in a month, I would invest in the ANZ preference convertibles. The reason for this is that the short time horizon is inappropriate for investments in risky securities. Both of the mining exploration investments are risky -- the payoff for these investments could be months or years later. Short-term movements are speculative at best. Telstra, unfortunately, is also a risky investment. It has declined steadily in value and with the government efforts to undermine its business at every turn there is little reason to believe that Telstra shares will bounce back in the next month. This leaves the ANZ preference convertibles, by default. However, preference shares are not good short-term investments either. There is unlikely to be significant...
Seeking to raise more capital," Amazon.com plans to sell about $600 million of convertible subordinated notes" (Mutter, 2000, p. 80). Amazon, at the time, was considered a much more substantial risk than it is currently. The issuance of convertible debt seemed very speculative at the time. Mutter even wrote that investors did not like "the equity-like risk assumed by debt holders" (Mutter, p. 80). but, the investment has paid off
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e-Broking industry and how Macquarie bank can capitalize on it. It has 3 sources. Online banking have been a phenomenon a few years back but today, the new trend is the inclusion of e-broking a concept that is being accepted by most of the online customers as ideal and convenient. Macquarie is one such firm that endeavors to exploit the opportunities that exist in this industry and aims to recruit
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