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Essay On Portfolio Theory

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Portfolio Theory
A portfolio is a various type securities that have been evaluated and selected to form a collection of investment. The portfolio is owned by an individual or organization where they will invite several investors to participate in diversified the risk. Portfolio theory is one of the best diversity risks tools because it has taken into account all available information that's needed. This allows investors to keep in mind how they should conduct risk dispersion optimization.
Harry Markowitz introduced the theory of modern portfolio theory. In this theory, they stressed that investors should focus more on how to build their portfolio valuation, rather than relying on the risks and rewards of a single security. The standard of investment advice is to find out …show more content…

Growth investment strategy is an investment that investors believe the stock market provides a good growth potential. In most cases, growth stocks mean a company whose earnings above-average rate compared to its industry or the overall market growth. Beside that, we must consider several key factors such as growth rate, amount and risks. When it comes to stocks, some data are essential for growth investors to acknowledge. For example the return on equity, projected earnings and increasing earnings per share.
Basically, we look into 4 criteria before we start investing in a company stock. First, we look at the history earning growth of a company. We need to evaluate and find a strong historical earnings growth based on the annual revenue and the performances of the company. We evaluated the earning per share at least 5 years to determine the position of the company in the market.
Next, is the we need to know the company strong forward earnings. The biggest problem with the advance estimate is that it's only an estimate. As a growth-oriented investors, they believe an ideal growth forecast is based on the credibility of a company they before trusting this prediction to be

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