Investment

Investment

Investing requires careful thought out analysis in order to determine the best solution that will give maximum return. In this case having inherited ten thousand dollars and tasked with the job of investing in two possible situations, namely: through the investment of the large value approach in which an establishment with large revenue and a good bargain is identified and secondly through the large growth approach by identifying companies with experience and a solid revenue growth.

Investing in the large revenue market funds shows an decreasing rate of return over the three years in each of the selected fifteen mutual funds with four or five ratings as indicated in the excel sheet attached. This approach offers very high returns but the risk involved is also very high. These values diminish within the three year period resulting in a lower return in the long term.

Investing the inheritance through the large value approach shows a larger rate of return on the investment over the same three year period. These high values of rate of return provide a good risk as an investment since the true worth of the investment may be undervalued and thus may be a source of good return in the long term.

In light of these I would invest the $10,000 in the large value companies stock as it ensures a lower risk and a consistent rate of return in my investment. Though in some case it may also be wise to invest in both the approaches as nothing is a near certainty in terms of the risk involved but for this case it is better to invest the funds in the value stocks.