Inestment Paper

Investing is critical to all who set goals in their lives. Over time, investing can offer you several opportunities like starting a business or firm, allowing the home of your dreams to become a reality, the possibility of enjoying more leisure time, and, of course, a financially secure retirement. However, investing alone cannot guarantee a brilliant financial outlook. It is a combination of restraint on expenditures, research to make wise decisions, and patience over the years, which will allow for success. To make intelligent investment choices five factors that must be taken into consideration are personality, suitability, income available for investment, risk aversion, and yield curve.

According to my psychological investment profile my personality is best suited for relatively safe investments. The psychological report indicated that my self-discipline and self-control are very high. Both qualities allow for better control over expenses and a higher propensity to save. The personality profile indicates that my investment personality is quite conservative, which in turn illustrates that I am risk averse. Being a risk adverse investor means that I prefer less risk as opposed to more. According to Vanguard Investments and Smart Money the yield curve is currently flat to inverted. For a yield curve to become inverted it must first be flat for a period of time, and then the curve becomes inverted. Yet, it is not guaranteed that a flat curve will become inverted. A flat curve indicates that the yields for short-term and long-term investments are almost the same. Normally, the curve slopes upward with long-term investments offering investors a higher yield, because more risk is associated with longer investments. When the yield curve is inverted the short-term investments are a better prospect for investors. At the moment the market is very volatile.

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