Likewise, a young investor may hold mainly equities. Investor risk tolerance is another impediment to achieving asset class diversification. Investors will low risk tolerance, for example, are unlikely to hold high equity positions and even less likely to utilize more obscure securities like hedge funds. Yet, portfolios without equities may be highly susceptible to changes in the prevailing interest rates and therefore lack diversification. Indeed, for many investors a fully-diversified

Investment Portfolio For this client, the total investment is $100,000. This is not the sum total of the investor's assets, but it will be invested in a diversified portfolio. It is assumed that the time horizon is medium-to-long-term. The investment portfolio will be built using the top-down approach, whereby asset classes are first determined and then the individual securities within those classes are determined subsequent. The first step in this process

A common thread through these fifteen stocks is that they not only represent diversification as a group, but most of the companies chosen also have a range diversification within the company's operations. The companies are spread around the world, and include a number of sectors. For example, within technology the portfolio has access to the health care sector through Cerner; within ADRs there is exposure to the Internet, chemicals and

Investment Portfolio The beta coefficient for Google, Inc. is 1.03 using the Excel Slope function (Christensen). Using the S&P 500 as a benchmark, this beta coefficient has a higher risk than the market (Christensen, How to Interpret a Beta Coefficient). With this stock included in a portfolio, it would need to be diversified with less riskier investments in order to balance the overall portfolio risk and return on investment aspects of

Investment and Portfolio Analysis With the increasing economic downturn in the economy, the need of investment has increased considerable. The potential investors generally foregoes their current leisure and earnings and investment their earnings and expect to earn benefits in future for the same. For analyzing the investment, we have taken into consideration a hypothetical investor who has $50,000 which needs to be invested in different, in different assets. Investment is one of the

Stocks have considerable more risk. Equity is subordinated to debt, which means that if the company goes bankrupt the bondholders get paid out first, before shareholders get anything. There is always the risk, therefore, that a shareholder could receive nothing for their shares, and lose all of their money. Even a bondholder might receive something -- pennies on the dollar -- in the event of bankruptcy, but a stockholder receives