The most important information about financial crises
Income Portfolio
Income portfolios are based on achieving profits through dividends and other recurring benefits that investors get. This type of portfolio is similar to defensive portfolios with a number of common denominators, but they differ in the stocks in which they invest, so that the income portfolio takes risks by investing in stocks. With relatively high returns, such as real estate, so that you can enjoy getting all the advantages of investing in such prosperous sectors without having to own real estate.
Speculative Portfolio
This type of portfolio refers to investments that require a high level of risk that is often compared to gambling, as these portfolios are not only aggressive but also bet on the success of a product or service in the future, and this portfolio is suitable for investors who aim to acquire, this Financial advisors recommend setting a limit on speculation of no more than 10%.
Hybrid Portfolio
The name of the portfolio refers to the principle of its work, as this type of portfolio is based on the integration of different types of assets in different ways to make money better, and this type of portfolio provides the maximum possible flexibility. It is rather high, as are fixed income instruments such as bonds, debt funds, etc.
What are the types of investments in investment portfolios?
Investment in investment portfolios is divided into two main types, and they are, as will be explained: [1]
Strategic investment: It is based on the purchase of financial assets because there is an opportunity for them to grow and to obtain a return from them in the long term, which means keeping them for a long time.
Tactical investment: It represents the activity of buying and selling in the hope of making profits through the portfolio in the short term.
How to start your investment portfolio
Some investment portfolios are a form of long-term strategic investment in the funds owned by investors, and accordingly, investors think carefully before starting to identify and arrange ideas and apply them on the ground, and most of them conduct a comprehensive study of the types of portfolios and the nature of the market, etc. Take the correct steps precisely to start with these portfolios, and this can be clarified through the following:
First: Assess the current situation
Planning for the future requires understanding the current situation of investors and deciding where they want to be. A comprehensive assessment of current assets, liabilities, cash flows, etc. is required, and the gap between the set goals and the current situation must be measured; To determine the desired business development path.
Second: Defining investment objectives
Determining the objectives depends on the risks and the expected return to be obtained from this investment, where the investor determines the amount of risk he wishes to face and the extent of fluctuations that he can bear. Track portfolio performance.
Third: Asset Allocation
Risk and expected return profiles are used to allocate assets, so that the investor can develop his own asset allocation strategies in which he wishes to invest; So that it can distribute assets in an optimal way that achieves optimal diversification to target expected returns, and this can be done by specifying percentages for different asset classes, including bonds, stocks and alternative investments.
Fourth: Determine your investment options
Investment options are determined based on the asset allocation strategies you have undertaken. The type of investment chosen depends on the investor’s preference for the type of active or passive management. Actively managed portfolios include both individual stocks and bonds if there are enough assets to achieve diversification, while portfolios that are actively managed include individual stocks and bonds if there are enough assets to achieve diversification. It is managed passively in partnership with selected index funds of different asset classes, as well as economic sectors.
Fifth: Monitoring, measuring and rebalancing
The management stage comes after the planning stage of the portfolio, and this includes measuring the performance of the portfolio at regular intervals, and monitoring the investments, and the investor’s position and objectives that he set are reviewed to ensure whether they need to be changed in case a gap is found or the results do not match what is planned, It is also possible to rebalance the portfolio, sell investments, and buy stocks that provide greater potential for growth and planned profit.
Global Financial Crisis 2007-2008
The global financial crisis is the worst economic disaster that occurred after the stock market crash in 1929 and the Great Depression, which started with the mortgage lending crisis in 2007 and then expanded into a global banking crisis that resulted due to the expansion of the process of granting real estate credit with real estate mortgages, which led to a drop in real estate prices. In the market significantly, and as a result, many banks failed in 2008 and many huge economic rescue measures were taken to limit the spread of damage to the banking sector and the economy, and this crisis has entered the global economy into a recession.
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