Investor Profile part.2
Liquidity: In this case you need to know how fast you need to convert your investment into cash. A highly liquid investment means that you can get your money at any time. In a low liquidity investment, it can take time to find a buyer and complete the sale process. And, some other investments can be "illiquid", that is, you will not be able to obtain your resources until a certain date or specific event. Return of investment: ROI is calculate by subtracting the initial value of the investment from the final value of the investment which equals the net return , then dividing this new number (the net return ) by the cost of the investment , and, finally, multiplying it by 100. Diversification: Is the best way to reduce investment risk. Diversifying means "not putting all your eggs in the same basket." Imagine that you have € 10,000 to invest and you use it all to buy shares in a single company. Also you have to know: 1. Investment horizon. ...