Investment is the way by which individuals try to increase their money or wealth through delaying their consumption of goods and services for later time in future through purchasing financial instruments or other assets that will in returns provide them with return in form of : interest, dividends or capital gains. Through investment investor required a return that compensates him for the time the money is committed, the inflation rate and the uncertainty of future payments. According to that investors expect to receive returns on future for his investments.
Figure [ 1 ] the risk return trade off
One of the most important concepts that any investor should realized is the risk return trade off. Risk is the possibility that actual return of investment will be different than the expected return. The principle of such concept says that for any investor who is willing to increase his money the relationship between risk and return is positive. This means that for every increase in risk there is an increase in potential return. According to that investors who seek high amount of return should be willing to bear a high risk. In the other hand investor who is taking low risk should know that he would get low potential returns. So lowering or increasing your returns will depend in the amount of risk you can handle. However, as risk means higher potential returns, also it means higher potential losses.
According to that Every investor must know his risk tolerance when choosing investment for his portfolio which will depend on his goals, income and other personal situation . Also he must finds the appropriate balance between risk and desired returns. That means that he must decide the amount of risk while at the same time become comfortable about his investments.
This report will analyze the performance of Galfar Engineering which is listed in Muscat Securities Market (MSM). It will be divided into 5 sections which are: * Over view about the