This is a portfolio of investments. An investment is something you buy with money in order to earn more money later, such as stocks and bonds. See what Client First Capital has to say
A method for organizing financial assets in order to maximize risk-adjusted returns, given your specific level of risk tolerance.
What is asset allocation?: Asset allocation is the division of your portfolio's assets into sub-portfolios called asset classes.
Why define an asset allocation?: You define your financial goals and then set out to meet them by investing in the appropriate mix of assets. By dividing your investment money among types of investments, you ensure that no one area dominates your overall results, which reduces risk over time. This is known as diversification.
Imagine you found $100 under the lawn. What would do with it? Would you: A) Buy a pair of shoes; B) Buy a smartphone; or C) Invest in the stock market? We know what you would choose! There's no doubt about that! C for sure!
Now let's imagine we gave you 100$ every month and we told you to put it somewhere safe (for example in your wallet). Where will you keep them?: A) In your pillow; B) In your closet; or C) In your bank account/in the stock market? The answer is clear, isn't it? C again!
Smart people buy low and sell high. When you buy something you're paying its price. The seller sells it at that price because he thinks the product has value (he's buying later if he needs to). You do this in order to make money when you sell it later (you can use your smartphone for months but when you'll buy a new one the old will lose all of its value). What determines how much someone sells something for? Demand & supply.
If there are no buyers the person who wants to sell won't find anyone who accepts his offer, so he'll lower it until he finds one willing to pay what he's asking. In other words: if many people want to buy at a certain price and few people want to sell the seller will charge more than he would in the opposite situation.
The demand comes from companies that see potential in products they can turn into money (a phone makes calls, could also be used for other things) and consumers who need something they think is useful. In order to make this decision everyone tries their best to anticipate what others will do: each of us knows that people sometimes get emotional when making decisions so we try not to let our feelings interfere with rational thinking.
Of course no one can know for sure if their prediction was correct or not but since they don't have infinite time / resources they usually take a guess based on their experience and hope it works out well enough. In this kind of a model it is quite easy to show that the items could get really expensive or even disappear since everyone has different opinions on what is useful and often consumes more than they need. Of course, no one wants to live in a world where there's nothing to buy except for a few very expensive things so we see people cooperating by sharing their resources (lending them, trading them) in order to reduce overall cost/risk.
If someone shares their resources with others then it becomes much harder for them to predict what will happen in the future so naturally, most of us are reluctant at first but when you think about it all kinds of products are actually made possible only because people cooperate with strangers everyday. It just takes some time before everyone realizes that cooperating with others is actually more important than having your own things.
The main point is that when people start cooperating with each other the need to make predictions about the future goes away because you know what will happen.
Client First Capital is offering for your better future so you can invest wisely. If you want to know more about it you can contact us or you can call on these numbers +971 55 425 6025 +91 903 504 4490. Our team will get in touch with you for all the further requirements.