1-The most important tales of success have been related with great business opportunities: Bill Gates and Paul Allen ( Microsoft ), Warren Buffet "The Oracle of Omaha" ( Berkshire Hathaway ), the Walton Family ( Wal-Mart ), etc. Someone with knowledge enough and business's sense, who, with the required timing, acquired a piece of such potential success, today is a member of the limited Billionaire's Club. Unfortunately, the best time for success on Microsoft, Berkshire Hathaway, Wal-Mart, etc, has gone. However, never is too late. There are present opportunities for new tales of success. Less than one percent, among the thousands of companies which try to prevail in the competitive present global market, are ranked among such that have an important opportunity for success. Part of DHC' wealth is the acquired knowledge, during the last ten years, and the creation of a system to first detect and after fully investigate, coals with potential enough to be transformed to diamonds, together with the use of all available, legal, and safe tools.2- Many companies which half a century ago were among the most important, among the strongest, today are almost insignificant when compared with leaders. The U.S. automotive and steel companies, all together, are far from the market capitalization of Microsoft, a postindustrial enterprise. Some of such postindustrial enterprises began in a room of the founder's house. Many individuals who half a century ago were among the wealthiest, today are almost insignificant when compared with Bill Gates. Thus, DHC' system seek a multiplying effect, using all available tools at the same time, to first surpass the wealthiest, and after continue being ahead.
The key to detect potential diamonds is to seek for companies with strong fundamentals and fuel enough to substantially accelerate present growth trends, together with the required timing, strength progression, and market conditions.
3- DHC' strategy is supported by fundamental analysis seeking quality, combined with technical analysis seeking timing. The market conditions are continuously observed, seeking all available information concerning macros, and watching S&P 500 Index, NYSE Composite Index, NASDAQ Composite Index, Nikkei, DAX, FTSE, etc. DHC' proprietary test includes: (A) Liquidity progression enough to build the holding or to sell positions under average conditions; (B) Intrinsic Value progression enough to avoid a "bubble's burst"; (C) Strength progression enough to provide a performance of at least 1000 % on a long term basis. (D) Confidence Level enough to minimize investment risk on a long term basis; (E) Uniqueness to provide specialties; (F) Avoidance of companies which rely solely on a commodity or a regulated service.
4- DHC' bonds are issued, on a private basis, in a jurisdiction where government charges no tax on interest earned, with a face value of ONE MILLION U.S.D., and a coupon of 14 %, payable on an annual basis ( one year maturity, 14 % APR ). A legally defensible operation of bond's buyer, in a more favorable business environment, could be beneficiary of a DHC' loan up to half a million U.S.D. Bond's buyer will have the benefit of a tax free income from interest ( ? ), and additionally, the opportunity to start over again. Using such proceeds bond's buyer could have the opportunity to joint DHC in a legally defensible high return joint venture.
5- DHC invest, on a long term and global basis, in equity of the companies of the world with the highest earnings growth for the next five to ten years, which previously pass DHC' proprietary tests. Companies provide the highest quality and a predictable value improvement of at least 1000 % for the next five to ten years. Companies provide the strongest return on equity, income per employee, profit margin, financial health and earnings growth for the next five to ten years. Likewise companies provide high confidence level and mean recommendation of buy or strong buy by all renowned analysts, as well as low risk expectation, no risk of bubble's burst, very high return expectation, low volatility, high liquidity progression, very high strength progression and uniqueness.
Investment strategy
In finance, an investment strategy is a set of rules, behaviors or procedures, designed to guide an investor's selection of an investment portfolio. Usually the strategy will be designed around the investor's risk-return tradeoff: some investors will prefer to maximize expected returns by investing in risky assets, others will prefer to minimize risk, but most will select a strategy somewhere in between.
Passive strategies are often used to minimize transaction costs, and active strategies such as market timing are an attempt to maximize returns.
One of the better known investment strategies is buy and hold. Buy and hold is a long term investment strategy, based on the concept that in the long run equity markets give a good rate of return despite periods of volatility or decline. A purely passive variant of this strategy is indexing where an investor buys a small proportion of all the shares in a market index such as the S&P 500, or more likely, in a mutual fund called an index fund.
This viewpoint also holds that market timing, that one can enter the market on the lows and sell on the highs, does not work or does not work for small investors, so it is better to simply buy and hold. The smaller, retail investor more typically uses the buy and hold investment strategy in real estate investment where the holding period is typically the lifespan of their mortgage.
Algorithmic trading
Buy and hold
CANSLIM
Contrarian
Liability driven investment strategy
Market timing
Trading strategy
Trend following
MoneyWeek Investment Advice
Wheel of fortune Design and test your investment strategy for a virtual wheel of fortune, optimize your strategies using different utility functions.
Virtual stock market Design and test your investment strategy for a virtual stock market, where three stocks and a bank account are available for investing.
Category: Investment (Source: Wikipedia)
Investment or investing[1] is a term with several closely-related meanings in business management, finance and economics, related to saving or deferring consumption.
Investment is the choice by the individual to risk his savings with the hope of gain. Rather than store the good produced, or its money equivalent, the investor chooses to use that good either to create a durable consumer or producer good, or to lend the original saved good to another in exchange for either interest or a share of the profits.
In the first case, the individual creates durable consumer goods, hoping the services from the good will make his life better. In the second, the individual becomes an entrepreneur using the resource to produce goods and services for others in the hope of a profitable sale. The third case describes a lender, and the fourth describes an investor in a share of the business.
In each case, the consumer obtains a durable asset or investment, and accounts for that asset by recording an equivalent liability. As time passes, and both prices and interest rates change, the value of the asset and liability also change.
An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. The word originates in the Latin
"vestis", meaning garment, and refers to the act of putting things (money or other claims to resources) into others' pockets. See Invest. The basic meaning of the term being an asset held to have some recurring or capital gains.
It is an asset that is expected to give returns without any work on the asset per se.
Types of investments
The term "investment" is used differently in economics and in finance. Economists refer to a real investment (such as a machine or a house), while financial economists refer to a financial asset, such as money that is put into a bank or the market, which may then be used to buy a real asset.
Business management
The investment decision (also known as capital budgeting) is one of the fundamental decisions of business management: Managers determine the investment value of the assets that a business enterprise has within its control or possession. These assets may be physical (such as buildings or machinery), intangible (such as patents, software, goodwill), or financial (see below). Assets are used to produce streams of revenue that often are associated with particular costs or outflows. All together, the manager must determine whether the net present value of the investment to the enterprise is positive using the marginal cost of capital that is associated with the particular area of business.
In terms of financial assets, these are often marketable securities such as a company stock (an equity investment) or bonds (a debt investment). At times the goal of the investment is for producing future cash flows, while at others it may be for purposes of gaining access to more assets by establishing control or influence over the operation of a second company (the investee).
Economics
In economics, investment is the production per unit time of goods which are not consumed but are to be used for future production. Examples include tangibles (such as building a railroad or factory) and intangibles (such as a year of schooling or on-the-job training). In measures of national income and output, gross investment (represented by the variable I) is also a component of Gross domestic product (GDP), given in the formula GDP = C + I + G + NX, where C is consumption, G is government spending, and NX is net exports. Thus investment is everything that remains of production after consumption, government spending, and exports are subtracted.
Both non-residential investment (such as factories) and residential investment (new houses) combine to make up I. Net investment deducts depreciation from gross investment. It is the value of the net increase in the capital stock per year.
Investment, as production over a period of time ("per year"), is not capital. The time dimension of investment makes it a flow. By contrast, capital is a stock, that is, an accumulation measurable at a point in time (say December 31st).
Investment is often modeled as a function of Income and Interest rates, given by the relation I = f(Y, r). An increase in income encourages higher investment, whereas a higher interest rate may discourage investment as it becomes more costly to borrow money. Even if a firm chooses to use its own funds in an investment, the interest rate represents an opportunity cost of investing those funds rather than loaning them out for interest.
Finance
In finance, investment=cost of capital, like buying securities or other monetary or paper (financial) assets in the money markets or capital markets, or in fairly liquid real assets, such as gold, real estate, or collectibles. Valuation is the method for assessing whether a potential investment is worth its price. Returns on investments will follow the risk-return spectrum.
Types of financial investments include shares, other equity investment, and bonds (including bonds denominated in foreign currencies). These financial assets are then expected to provide income or positive future cash flows, and may increase or decrease in value giving the investor capital gains or losses.
Trades in contingent claims or derivative securities do not necessarily have future positive expected cash flows, and so are not considered assets, or strictly speaking, securities or investments.
Nevertheless, since their cash flows are closely related to (or derived from) those of specific securities, they are often studied as or treated as investments.
Investments are often made indirectly through intermediaries, such as banks, mutual funds, pension funds, insurance companies, collective investment schemes, and investment clubs.
Though their legal and procedural details differ, an intermediary generally makes an investment using money from many individuals, each of whom receives a claim on the intermediary.
Personal finance
Within personal finance, money used to purchase shares, put in a collective investment scheme or used to buy any asset where there is an element of capital risk is deemed an investment.
Saving within personal finance refers to money put aside, normally on a regular basis. This distinction is important, as investment risk can cause a capital loss when an investment is realized, unlike saving(s) where the more limited risk is cash devaluing due to inflation.
In many instances the terms saving and investment are used interchangeably, which confuses this distinction. For example many deposit accounts are labeled as investment accounts by banks for marketing purposes. Whether an asset is a saving(s) or an investment depends on where the money is invested: if it is cash then it is savings, if its value can fluctuate then it is investment.
Real estate
In real estate, investment is money used to purchase property for the sole purpose of holding or leasing for income and where there is an element of capital risk. Unlike other economic or financial investment, real estate is purchased. The seller is also called a Vendor and normally the purchaser is called a Buyer.
Residential real estate
The most common form of real estate investment as it includes the property purchased as other people's houses. In many cases the Buyer does not have the full purchase price for a property and must engage a lender such as a Bank, Finance company or Private Lender. Herein the lender is the investor as only the lender stands to gain returns from it. Different countries have their individual normal lending levels, but usually they will fall into the range of 70-90% of the purchase price. Against other types of real estate, residential real estate is the least risky.
Commercial real estate
Commercial real estate is the owning of a small building or large warehouse a company rents from so that it can conduct its business. Due to the higher risk of Commercial real estate, lending rates of banks and other lenders are lower and often fall in the range of 50-70%.