The meaning of investment

The meaning of investment

investmentInvestment in the basic terms can be defined as the allocation of anything that has a productive capacity to produce more valuable goods or services . In investment therefore you allocate a certain proportion or certain goods or services and make profits. In the case where money is used, investment can be defined as the allocation of a certain amount of money to purchase financial commodities or asset in order to gain returns in terms of profits. Everyone in this modern world has at one time or the other had to prefer investing. This is because of the dynamic word that turns every opportunity in making valuable returns. In the capitalist world, investment is just necessary for anyone who wants to add value to his or her statue. In investment, there has to be saving or deferring of consumption in order to increase appreciation of value of these goods. In other words, in order to gain interest, value appreciation or income, you have commit some resources like money and time.

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Eligibility of Life Insurance

Eligibility of Life Insurance

Life_Insurance_EligibilityWhen calculating life insurance, insurance agents not only assess your financial documents, they also assess the risk factor by which you live your life. The insurance agency will take in basic factors such as age, sex, height and weight, individual and family health history, identity proof, employment status, marital status and number of children. Then they take into account existing insurance, the hazard levels at work, tobacco use, alcohol use, hazardous hobbies (such as bungee jumping) and travelling to dangerous countries which pose a threat to an individual’s life. Depending on your geographical location, citizenship or residency status in the country may or may not matter. This varies in different countries. In general, age eligibility would require the individual to be between 18-60 years old. Minors are ineligible for applying for insurance and senior citizens generally are not allowed to apply for life insurance as they have reached a high scale on their mortality index.

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what is Hedging

what is Hedging

hedgeHedging an investment is a way of attempting to ensure against a negative event happening. Individuals hedge whenever they purchase insurance. If you purchase car insurance, it does not mean they will never be in an accident. It simply means that it reduces the negative impact of an accident, financially speaking at least.

For example, you own a fund named ABC Fund in your portfolio. You want and expect this particular fund to go up. But in order to hedge against the potential of ABC Fund going down, you invest in a new fund called XYZ fund which is negatively correlated with ABC Fund. So when ABC increases in value, XYZ will decrease in value. If you own a stock and you believe the company you invested in has good long term potential but you are concerned about short term potential losses you can buy a put option. A put option allows you as the buyer to sell the stock at a set price in the future.

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