Market Analysis for Private Investors

Market Analysis for Private Investors

Introduction

When one has savings for investing in instruments other than time deposits in banks, the option that comes to mind is almost always the equity market.  Investing in shares has been believed to be a wise decision for want of diversity in the forms of investment that a person makes.  Other than diversity, increased yield of investment is another reason why people would want to park some of their money in shares of companies listed in the bourse.

However, investing in equities is not as simple as putting money in a time deposit at the bank of one’s choice.  While the latter involves generally less risk and promises a specific amount of return and total proceeds of one’s investment after a given p of time expressed in terms of number of days, investing in equities is akin to taking a ride that can end up anywhere but the intended destination – no matter how much detailed planning and thorough analysis have been put into each move or decision made.

In the light of such complications that come with investing in equities, fund management companies have sprouted to offer retail investors their services which include making investment decisions for them and looking out for attractive returns and the safety of the invested money.  These companies do not always deliver the savory returns and the immunity from losses that they seem to profess to deliver while wooing clients. However, they serve to be the better option for a good number of small, retail investors to take, given that they are mostly not well-acquainted with the intricacies of the world represented by the bourse.  The prevailing question, then, is whether or not choosing to invest in managed funds – in lieu of putting together a stocks portfolio based on one’s research and pure preference – is indeed the wise course of action to take.

It has been said that collective investments are generally assumed to provide small investors with reduced levels of risk and greater potential for steady profits than a direct investment portfolio.  This research paper aims to validate such statement.