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Essay / Research Paper Abstract
This 4 page paper is written in two parts. The first part looks at why it may, or may not, be attractive to invest in the stock market during a recession. The second part of the paper identifies a share that might be worth an investor considering as part of an investment portfolio. The paper refers to the economic position in December 2009. The bibliography cites 2 sources.
Page Count:
4 pages (~225 words per page)
File: TS14_TErecinvest.rtf
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Unformatted sample text from the term paper:
make a profit. The motivation for investment is more complex than just the desire for profit, there will be an assessment of other aspects, such as the potential level of
profit and level of risk, the term of the investment and the belief regarding the future of markets, There will also be a consideration of the alterative to stock market
investments. If there is a potential investment of $100,000 there are some strong arguments against investing this in the markers at the current time. The first reason is the
current state of the markets, where there does appear to be some recovery since the low point of March 2009, but the growth rates are constrained and there are many
firms that are seeing significant falls in their profitability. If there are any more economic shocks or significant bad news items, then the fragile market may see a further fall.
Figure 1 shows the performance of the S&P 5000 over the last year, if this is considered in terms of the recent history and the weak firm of efficient market
hypothesis is applied there is only limited scope for improvement in the short term and that with this in mind there may be better alterative investments for short term returns.
Figure 1 S&P 500 1 Year performance (Yahoo Finance, 2009) There are still many companies failing, the issue is not only the increased risk in this environment, which
is not being matched by increased reward, it is the potential; knock on effect that may be seen if there are problems seen in the economy or there are any
further scandals. There are also some reasons why the current environment may provide a good opportunity to invest. If investors are seeking to invest to make a profit they
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