6. Investment

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Ejemplo

investment portfolio

An investment portfolio is a collection of assets, such as stocks, bonds, and real estate, owned by an investor

risk diversification

Risk diversification involves spreading investments across different asset classes to reduce risk

return on investment (ROI)

Return on investment is a measure of the profitability of an investment, calculated by dividing net profit by the cost of the investment

capital gain

A capital gain is the profit realized from the sale of an asset, such as stocks or property

dividend yield

The dividend yield is the annual dividend payment divided by the market price of a stock

market risk

Market risk refers to the potential for an investor to lose money due to fluctuations in the market

asset allocation

Asset allocation involves dividing investments across various asset categories to balance risk and return

equity investment

Equity investments involve purchasing shares in a company to gain ownership and potential profit

debt investment

Debt investment refers to purchasing bonds or other debt securities to receive regular interest payments

fixed income

Fixed income refers to investments that provide regular and predictable income, such as bonds

mutual fund

A mutual fund pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities

hedge fund

A hedge fund is a pooled investment fund that employs various strategies to earn returns for its investors

private equity

Private equity involves investing in privately held companies or ventures, typically through buyouts or venture capital

venture capital

Venture capital is funding provided to startups and small businesses with high growth potential

real estate investment

Real estate investment involves purchasing properties to generate rental income or capital gains

stock market

The stock market is a platform where investors buy and sell shares of publicly traded companies

bonds

Bonds are debt securities issued by governments or corporations to raise capital, offering periodic interest payments

investment risk

Investment risk refers to the likelihood of losing money or failing to achieve a desired return on an investment

interest rate risk

Interest rate risk occurs when changes in interest rates affect the value of investments, particularly bonds

liquidity risk

Liquidity risk refers to the possibility of not being able to sell an asset quickly without affecting its price

inflation risk

Inflation risk is the chance that the purchasing power of an investment's returns will be eroded by rising prices

risk-return trade-off

The risk-return trade-off suggests that higher potential returns come with higher risk

yield

Yield is the income return on an investment, typically expressed as a percentage of the investment's cost or market value

capital preservation

Capital preservation aims to prevent the loss of the original investment amount while earning a return

growth investment

Growth investments focus on assets that are expected to increase in value over time, such as stocks of emerging companies

value investment

Value investment involves buying undervalued assets that have the potential for long-term appreciation

income investment

Income investments are focused on generating steady cash flow, such as from dividends or interest payments

portfolio diversification

Portfolio diversification reduces risk by spreading investments across different sectors or asset classes

investment horizon

The investment horizon is the length of time an investor plans to hold an investment before selling it

time value of money

The time value of money concept states that a dollar today is worth more than a dollar in the future due to its earning potential

compound interest

Compound interest is the interest calculated on the initial principal and on the accumulated interest from previous periods

discounted cash flow (DCF)

The discounted cash flow (DCF) method values an investment based on its future cash flows, adjusted for time value

payback period

The payback period measures the time it takes for an investment to repay its initial cost from its cash inflows

net present value (NPV)

Net present value calculates the difference between the present value of cash inflows and outflows over time

internal rate of return (IRR)

The internal rate of return is the discount rate at which the net present value of an investment becomes zero

capital budgeting

Capital budgeting involves planning and evaluating investments in long-term assets, such as machinery or new projects

risk management

Risk management involves identifying, assessing, and prioritizing risks to minimize potential losses

asset valuation

Asset valuation determines the current worth of an investment based on various factors such as market conditions and future earning potential

inflation-adjusted return

Inflation-adjusted return measures the real return on an investment after accounting for inflation

financial leverage

Financial leverage uses borrowed funds to increase the potential return on an investment, but it also increases risk

exchange rate risk

Exchange rate risk arises from fluctuations in currency values that can affect the value of investments in foreign markets

investment grade

Investment grade refers to the rating of bonds or securities that are considered low risk by credit rating agencies

securities

Securities are financial instruments that represent ownership in a company or a debt obligation

commodity investment

Commodity investment involves buying raw materials like oil, gold, or agricultural products

sustainable investment

Sustainable investment focuses on assets that align with environmental, social, and governance (ESG) criteria