ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An investment philosophy is a set of beliefs and principles that guide an investor’s decision-making process. It is not a narrow set of rules or laws, but more a set of guidelines and strategies that take into account one’s goals, risk tolerance, time horizon, and expectations.

Detailed explanation-2: -Risks Drive Expected Returns. We believe that risk drives expected returns. What this means is that distinct asset classes have distinct risk-return profiles; that is, investors are rewarded for the risks that they are willing to assume.

Detailed explanation-3: -Equity Risk: This risk pertains to the investment in the shares. The market price of the shares is volatile and keeps on increasing or decreasing based on various factors. Thus, equity risk is the drop in the market price of the shares. Interest Rate Risk: Interest rate risk.

Detailed explanation-4: -At the heart of any sound investment strategy rests an investment philosophy. An investment philosophy, simply stated, is a set of guiding principles that govern all investment decisions made by an entity. Most investment managers promote their own unique investment philosophies.