Personal Finance Concepts Investing Essay Example for Free

Personal Finance Concepts Investing undertakeAccording to the finance researchers a portfolio refers to an appropriate collection of enthronizations for an institution or a single individual. An investment portfolio is constructed by financial advisors or a retainer their main task affects investment analysis that ar useful during purchasing of stocks and bonds, and other business assets. . Cliff uses his present finances to determine his future memory and finance position. Cliff financial statement seems to spread in many fields, he invests in resolved assets and even before he could fully exploit his new investment strategy he is already investing in shares and bonds. Basically this is diversification and investing assets such(prenominal) as bonds and shares in such a scenario is exposing a high percentage of ones investment at happen (Grant 2005).Cliff is a risk taker therefore he is more likely to invest in income securities and unwarranted investment such as the equ ities. indeed Cliff will tend to have very low cash holding and shares, in accompaniment he is not expected to hold high levels of securities as savings since his age is allows him to have a long time to invest in most cases age is a great determinate in an individuals saving amount and investment, though Cliff will tend to save for his future plans such as his wedding plans, his marginal propensity to save will still be quite low.Since Cliff is earning an penny-pinching of $340000 he I expected to distri bute his earning to his present and future expenses, A great source of lessenings finances is in terms of bonds and shares which are a trusty way to invest but the shortcoming with Cliffs investment is the fact that he did not take a good research before imposing a big sum of his money into the investment, the investment in bonds and shares involve a high percentage of risk and for that reason if they are not carefully researched on they need high degrees of losses or very li ttle profits.In that light they are not include in the construction of a portfolio, instead the items that can be included in the construction of a portfolio are savings, cash at hand and revenue that is already attained or the degree of risk is not too high. Using Cliffs example he can spread his earning such 30% of his total earnings is equities, 40% income securities, 20% sundry expenses and 10 % as savings. The assumption is that pearl is a young risk taker hence his securities will tend to be and also his savings and cash. on a lower floor is an example of Cliffs portfolioReferencesFrasca , R, (2006) Personal Finances An Integrated Planning Approach, 7th Ed Pearson Prentiss abidanceGrant, R (2005) Contemporary Strategy Analysis Blackwell printKarnani, A (1981) Business Portfolio an analytical Approach Harvard Publishing.