Personal Finance Concepts Investing Essay

According to the finance searchers a portfolio refers to an appropriate collection of enthronements for an institution or a single individual. An investment funds portfolio is constructed by financial advisors or a retainer their main task involves investment analysis that are helpful during purchasing of stocks and bonds, and other business assets. . Cliff uses his present finances to rig his future holding and finance position. Cliff financial statement seems to feast in many fields, he invests in fixed assets and even sooner he could fully exploit his new investment strategy he is already investing in shares and bonds. Basically this is diversification and investing assets much(prenominal) as bonds and shares in such(prenominal) a scenario is exposing a high piece of ones investment at endangerment (Grant 2005).Cliff is a risk taker whence he is more likely to invest in income securities and unwarranted investment such as the equities. Hence Cliff will tend to wipe out very low cash holding and shares, in addition he is not expect to hold high levels of securities as savings since his time is allows him to have a long time to invest in almost cases age is a great determinate in an individuals saving come up and investment, though Cliff will tend to save for his future plans such as his wedding plans, his marginal propensity to save will politic be quite low.Since Cliff is earning an approximate of $340000 he I expected to distribute his earning to his present and future expenses, A great source of dribs finances is in terms of bonds and shares which are a grave way to invest but the shortcoming with Cliffs investment is the fact that he did not take a good research before imposing a big sum of his money into the investment, the investment in bonds and shares involve a high percentage of risk and for that causa if they are not carefully researched on they bring high degrees of losings or very little profits.In that light they are not includ ed in the construction of a portfolio, instead the items that can be included in the construction of a portfolio are savings, cash at hand and revenue that is already attained or the degree of risk is not too high. Using Cliffs example he can spread his earning such 30% of his total earnings is equities, 40% income securities, 20% sundry expenses and 10 % as savings. The assumption is that cliff is a young risk taker hence his securities will tend to be and in like manner his savings and cash. Below is an example of Cliffs portfolioReferencesFrasca , R, (2006) Personal funds An Integrated Planning barbel, 7th Ed Pearson Prentiss HallGrant, R (2005) modern-day Strategy Analysis Blackwell PublishingKarnani, A (1981) Business Portfolio an analytical Approach Harvard Publishing.