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Analyzing Investment Strategies

Learn about the top 3 best investment strategies, including ETFs, real estate, and paying off debts, as well as the top 3 worst strategies such as collectibles market, savings accounts, and commodity futures.

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Analyzing Investment Strategies

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  1. Analyzing Investment Strategies ZiliZhou-Intern

  2. Investment Strategy • A systematic plan to allocate investable assets among investment choices such as bonds, certificates of deposit, commodities, real estate, stocks, etc. • A universal recommendation shared among financial professionals: a. assettsgoals b. time horizon c. risk tolerance.

  3. Top 3 Best Investment Strategies • ETFs (Exchange-Traded-Funds) • Real estates • Paying off debts

  4. ETFs (Exchange-Traded Fund) • A basket of assets combination including stocks, commodities, bonds, etc. -without ETFs, the commodity market itself is terribly performed. • Diversify the portfolio and the risk of a particular sector of investment • High trade flexibility. • Passively managed. -less fee • Tax benefits. -tax is incurred only when a sale is made

  5. Real Estates • Mortgage rate is still in the lower end and moves flatly. • Has multiple ways of generating profits. a. Holding actual property -house construction -rental income b. No physical property -mutual funds, estate notes and shares -REITs (real estate investment trust) • Housing inventory is still low.

  6. Paying off Personal Debts • Low risk, high returns. • Clear cyclic charges. -the average APR is over 17% and still increases • Improve credit scores.

  7. Top 3 Worst Investment Strategies • Collectibles market • Savings accounts • Commodity futures

  8. Collectibles Market • Swarming with frauds. -most investors do not have enough professions to distinguish them. • No future guaranteed. -limited amount of buyers and sellers -not a public market • Should only be considered by individuals with at least US$ 30 million net worth.

  9. Savings Account • The worst investment is to not invest on anything. • (Average annual) Interest rate<Inflation rate. -Depreciation • No risk=highest risk.

  10. Commodity Futures • Individuals lack proper resources and time to analyze a commodity market thoroughly. • Cannot predict the future based on current value. -a common mistake investors make on the commodity market. • Very sensitive towards unknown events, e.g. weather, political tumult, natural and man-made disaster, etc.

  11. Summary

  12. Remarks • Take risks when necessary, do not try to avoid them. • Diversify the portfolio, reduce the risks and impact of a particular sector. • Do not over-spend money, pay off debts regularly. • Spend time and energy in understanding a market before invest in it. • Never enters a market/industry that you are not familiar with.

  13. Resources • Proposed Rules: Exchange-Traded Funds; Federal Register; Vol. 73, No. 53; Tuesday, March 18, 2008 • Investment strategies, Business Dictionary • http://www.businessdictionary.com/definition/investment-strategy.html • Rose, Jeff; “7 Best Investments To Make In 2019”; Forbes; Dec.27, 2018 • https://www.forbes.com/sites/jrose/2018/12/27/best-investments-2019/#2f63ab1469bc • Orton, Kathy; “Experts weigh in on what the 2019 housing market will bring”; Washington Post; Jan.7, 2019 • https://www.washingtonpost.com/business/2019/01/07/experts-weigh-what-housing-market-will-bring/?noredirect=on&utm_term=.3dd2ab466e47 • Art & Finance Report 2017; Deloitte; • https://www2.deloitte.com/content/dam/Deloitte/at/Documents/finance/art-and-finance-report-2017.pdf • Montag, Ali; “Billionaire Ray Dalio: Why saving in cash is ‘the worst thing you could do”; CNBC; Nov.13th, 2018 • https://www.cnbc.com/2018/11/13/bridgewaters-ray-dalio-saving-in-cash-is-the-worst-thing-you-can-do.html • Anonymous; “Best Online Savings Accounts for April 2019”; Bankrate; Apr.9th, 2019 • https://www.bankrate.com/banking/savings/rates/

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