Question

Perform the task below. Suppose you have savings in the bank that you want to invest in stocks and bonds instead of setting up in a new business. Write one to two paragraphs discussing what method you can use to make the investment and explain the reasons for your decision.​

Answer 1

Suppose you have savings in the bank that you want to invest in stocks and bonds instead of setting up in a new business.

• Investing needs fundamental and market analysis, it is an individual choice of how much amount they want to invest from the savings account.
• A person must be a risk-taker as investing in stocks and bonds is risky. There can be both systematic risk and unsystematic risk. There can be a market risk where a company's valuation may decline due to an economic crisis. It has happened in 2008, the whole market was crashed and many investors suffered losses.
• There is a difference between an aggressive investor and a moderate investor, it totally investor preferences. Suppose, they want to get a high return within a short period they would prefer in investing in riskier stocks and bonds.
• If someone is new, they must safely invest in stocks with adequate knowledge.
• Always invest in stocks of a company that have less risk and have brand value, companies like - Hindustan Unilever, Tata is always recommended for beginners.
• There are many applications for investing in stocks, bonds, or mutual funds are - Grow, Upstox, Zerodha, and so on.