Asset
Allocation
Is a tool to accomplish a diverse
portfolio; therefore to figure
out how much of ones portfolio
should be invested/allocated in
different types of securities
such as common shares, preferred
shares, mutual funds, bonds, cash
and cash equivalents.
In developing the proper asset
allocation strategy one should
take into consideration an individuals
age and the current objectives
that they are looking to accomplish
in their portfolio. A simple rule
of thumb is that younger investors
tend to be more risk tolerant
to receive more aggressive capital
gains while the more mature investor
becomes more conservative and
secure, therefore enabling them
looking to protect their capital
and receive a modest income.
Diversification
Is the art of spreading your investments
around, therefore not to be weighted
too heavily in one sector or in
one security. In simple terms
'not having all your eggs in one
basket', an example being the
new economy high tech internet
boom of a few years back, investors
were caught up in a frenzy of
internet go-go stocks and forgot
to balance their investments in
other more traditional bell-weather
securities.
Having the ability to trade off
a portion of risk for balance
gives you a higher degree of security.
Therefore you accept a slightly
lower return but are less susceptible
to volatile market fluctuations.
Dollar
Cost Averaging
Investing equal increments of
funds on a consistent basis to
the same security, sector, mutual
fund etc. Therefore the ability
to price averaging the cost on
downward and upward swings in
the market and achieving the average
mean trading acquisition price.
This allows the markets historic
rate of return factor benefit
your overall portfolio growth.
Hedging
Limiting the risk associated with
some investments. Stock investors
may use options to hedge their
potential losses or lock-in their
profits in certain positions.
A sophisticated strategy used
by larger investors to absorb
volatile market swings.
Risk
Reward
Knowing how much risk one is willing
to assume for a certain level
of capital gains. Understanding
the risk involved in every investment
that one undertakes and having
set objectives in the amount of
returns that they are looking
to achieve when assuming a degree
of risk. The higher return one
is looking for, the higher risk
one is willing to assume. Therefore
pre-set the level of returns expected
in a portfolio, and limit the
risk accordingly.
Investment
Basics
Here at
ECA
we pride ourselves upon the ability
of molding the right management
mix to suit the individual portfolio
needs of our clients. The comprehensive
services we provide in the market
place include full research coverage
on all major exchanges in Asia,
Europe and North America, also
a wide variety of investment products
such as stock, bonds, mutual funds
and term deposit. The expertise
of our full service retail division
pride themselves on accurate research
and timely anticipation of the
markets direction.
Objectives
Short-Term
Capital Appreciation
Speculation for higher anticipated
gains, higher risk in expectation
for capital gains that will out
perform the market growth. This
is suitable for the aggressive
investor that can assume a higher
degree of risk in return for exceptional
gains. The usual investment product
to achieve this investment objective
is common share ownership.
Long-Term
Growth and Income
Conservative secure, investment,
therefore to preserve principal
and receive an interest income
through dividends, also the potential
for modest capital gains. Suitable
for the conservative investor
who seeks wealth preservation
and maintains their buying power
against inflation. Investment
goals are annual income as opposed
to capital gains. The usual investment
product to archive this investment
objective is preferred share ownership.
Please feel free to contact an
Investment Consultant here at
ECA
to discuss a mix of investment
objectives that are suited to
meet your needs.
