In this subject, you will be introduced to the basic principles of investing. A discussion will be made of the main characteristics of investments with an emphasis on risk and return and the trade-off between the two. The subject focuses on the concepts of portfolio investment and the importance of risk management, plus addresses the issues of correlation and diversification.
Identification of the risk profile of an investor is of critical importance in selecting an investment portfolio. The process of asset allocation is a very subjective one and particular to the needs of individual investors. You will study the process of asset allocation, as well as some basic investment approaches.
While most people would have a number of basic investment objectives, few people are in a position to be able to devise a plan to help them achieve their objectives. A key ingredient to being able to implement a comprehensive financial plan is determining the investment products that may be appropriate for an investor. We will review the characteristics of individual investment products.