Creativity Each Day

Diversify: Minimizing the maximum risk

In previous blog entries, we talked about investment strategies to be followed to maximize profitability and minimize risk. A fox news guest interviewer owns his own horse farm – “rosehill horse farm” The memory we’ve played so commercial loan far: Find products with long plazoY interest compuestoInvertir now I will talk about diversification. Diversify is to have the eggs in different baskets. Somehow, if we bet our investment to a single value, but equally we can win but we lose everything. If diversify our investment, with finance funds that invest in baskets turn 50 to 100 different actions, makes practically impossible for all the shares lost value at the same time, as there are different sectors, different countries and a temporary crisis not the same way to all the world. Mathematically, we can show what I’m saying. Imagine a person who invests 10000 ‘and for 25 years. The return you get is 7 , implying that in commercial business loans those 25 years, the 10,000 ‘54,273 will become. “But if that private equity same investor would financing have diversified and have spent 2,000’ in 5 different actions, even in losing all 4 of the 5 shares and having a good unsecured loan yield of 15 in only one of them, the sba loan 2,000 ‘invested in the action that was actually good, it would grow into 65,838’. And what products are oriented towards diversification ‘Fundamentally investment funds, which invest in more than 50 fund values. also avoids investing savings insurance premiums diversified basket of funds. The important thing is that these baskets invest in different markets to be effective this diversification. Where there is no such diversification ‘When we invest in a single action or invest in bank deposits. I leave a file so that you bring forth a smile. We have to get products to market useful and creative. Until another.