04 CP

Running Head: SUITABLE INVESTMENT MODEL 0

Model of suitable Investment

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Model of Suitable Investments

As per investment strategy, the suitable model for investment must reflect upon the aggressive nature of investor. Risk tolerance highly depends upon the nature of investor. Therefore, the aggressive investor pursues an aggressive policy of investment. Focusing more on the growth and expansion, whereas compromising on the risk to increase.

If the emphasis of an investor is to growth, then the most feasible option for investment is to increase the income and let the asset reserve ratio at low levels. For example, the asset should be converted into a liquid form to allow more transaction capacity to the organization. Investment in real estate and precious objects. On the other hand, investment for growth means that the investor should prioritize its investment in the sectors of stocks, and businesses (Bodie, 2013). Insurance should be used to keep the balance of the risk factor and to avoid any unforeseen circumstances. This approach will be of much assistance in achieving long term goals of the investors, that is, growth and profit maximization in this case.

The focus of the client is to take a risk in medium to short term and to secure future. Hence, insurance investment is on priority but the assets are converted to capital investment in the stock market and other investment. In order to assure a little reserve ratio and focus on generating income, the investor is supposed to lend money to the bank and similar mutual funds to reduce risk level and increase income level. This approach also helps in enhancing asset reserve ratio. In entire this process, the assets are converted into investment for growth purposes and this resulted in an increase in risk factor and decrease in reserve ratio. Income will not be largely influenced, but the future income has higher tendency to increase.

References

Bodie, Z. (2013). Investments. McGraw-Hill.