Investment objectives, Financial Management

Assignment Help:

Investment Objectives:

Any investment should always start with identifying its objective. Thus, the first step in the pension fund investment management system is defining the investment objectives. Pension funds are invariably long-term investments. The investment horizon in these funds is typically 25-35 years. Thus, the objective of the fund manager should be of long-term appreciation. However, having said that, the amount of safety the fund manager has to practice cannot be stressed enough. The consideration of risk and its constraints are important because it has a direct impact on the returns. As the fund's main focus is on the returns on the investments, it is very important to decide before hand what it aims to achieve by investing. Investment objectives categorize the area or a set of portfolios, that would indicate a successful investment program. Though broad statements of investment objectives are generally included in the mission statement, a list of quantifiable investment strategies for a specific period of time has to be covered in the investment objective. The plan sponsor may set the investment objective at various levels of the plan within its investment program. An efficiency investment objective can be viewed in two ways - incurring the lowest cost for performing the various functions and reducing the economic cost of the overall organization through surpluses generated in these funds.

 


Related Discussions:- Investment objectives

Define measures that propose to prevent the recurrence, In an integrated wo...

In an integrated world financial market, a financial crisis in a country can be rapidly transmitted to other countries, causing a global crisis. What kind of measures would you pro

What is meaning of perpetuity, What is meaning of Perpetuity If annuity...

What is meaning of Perpetuity If annuity is expected to go on forever then it is known as a perpetuity and then the above formula reduces to: Present value: A/i Perpetuit

A-/a3, This is usually the third- or fourth-highest rating that a rating ag...

This is usually the third- or fourth-highest rating that a rating agency allocates to a security or insurance carrier. It is frequently the lowest investment-grade rating, but it i

Margin and marking to market, The collaterals used in the repo market...

The collaterals used in the repo market are high quality securities; but they are also not free from credit risk. In our earlier example, we see the dealer borrow

Estimating cash flows in valuation process, The first step in valuati...

The first step in valuation process is to estimate the cash flows that are expected to be received in the future. In debt securities, there are two types of possi

Nature of current liabilities, Current Liabilities: A liability is an ...

Current Liabilities: A liability is an obligation to convey assets or do services at some future date. For purposes of balance sheet analysis, it is important to create a dist

International financial system, International financial system has always b...

International financial system has always been a debatable and crucial focus of the world discussion and it is mainly due to the repression of the economies especially after the cu

Valuation using multiple discount rates, We have seen computation of presen...

We have seen computation of present value using single discount rate. But the right way to value a cash flow of a bond is to use multiple discount rates, i.e valuing th

Compare and contrast a forward contract and an option, QUESTION (a) Bri...

QUESTION (a) Briefly define foreign exchange rate risk and the three different types of exchange rate risks (b) Identify and outline the different methods of internal and ex

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd