But you cannot just enter in the financial market and start investing with no criteria, becuase if your just loocking for luck, you better go to a casino rather than aquiring stocks. You therefore need to follow an Investment process which should be something like this:
(1) SECURITY AND MARKET ANALYSIS: What you should first do is to asses/analyse the risk and expected-return attributes of the entire set of investment assets.
(2) Portfolio Theory: After analysing the market( which we will learn how in future lessons) you should configure your investment portfolio by determining the best risk-return opportunities available in the financial market.
According to the personality of the person, we can find three kind of Investors:
1st- Risk averse investors:
nA risk averse investor penalizes the expected rate of return of a risky portfolio to account for the risk involved. They take a lot into account the volatility. In this way, they never have very high profits but they also have very few possibilities of loosing money.
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