 |
| Making Money Online |
Whenever an investor struggles with asset allocation, the two
pertinent questions that pop into their heads are: what is a risk-free asset?
How does it affect their portfolio?
A few years ago, the term “risk-free asset” used to be a
mere technical jargon to any investor. However, a sharp decline in the value of
shares in the stock market plus the looming uncertainties in the banking sector
in recent years has raised the level of interest and curiosity regarding the
term in the minds of both existing and new investors.
The prominence of the concept also stems out of the fact
that in the past, the investors were more concerned about the current value of
shares and their long-term objectives. Due to it, a majority of investors have
also started forming their decisions based on a balanced view of both long-term
and short-term objectives.
What does a risk-free
asset mean for an investor?
In general sense, investors associate risks with the
uncertainty of returns in an asset class. To put it another way, a greater
degree of uncertainty surrounding the future returns for an asset class
translates into a greater degree of risk with it. Thus, a risk-free asset can
be defined as one with which there is a greater degree of certainty for future
returns.
According to most academics, risk-free assets refer to
assets like treasuries as the returns on them in future would be almost same as
the interest rate on them at the present time. At the same time, a majority of
them also subscribe to the fact that the concept of a risk-free asset is
abstract as there is some degree of risk associated with almost all financial
assets.
An important thing an investor should remember in this
regard is that knowledge of returns on this kind of asset does not assure a
profit in terms of purchasing power. Factors like inflation can have a
significant effect on the purchasing power of risk-free assets.
Do you wish to stay
ahead in the race?
Are you tired of being on the losing side despite giving it
your best shot while thinking of making money online? Priscillian Order can help you with this. Here, you will not
only get the latest insights but also analysis on the market trends plus a good
understanding of the tricks of the trade pertaining to investment.
It is rightly said that knowledge is power and at
Priscillian Order, you will come to know how you can implement the theoretical
knowledge of investment into practice under the guidance of Mr Porschay Persh –
the pioneer of making money online.
So, without a further delay, join Priscillian Order to feel the difference and
establish yourself as a top investor.
No comments:
Post a Comment