金融英語論文-預(yù)覽頁
【正文】 lows a formula like this :Dollars invested in stocks = mX(Present wealth Floor) where m 1 The floor is the level of wealth where the investor cannottolerate risky investment and is not willing to put any acent in stocks. For example, the investor needs $60 (Floor)for retirement and is not willing to risk this amount in anyinvestment. His present wealth is $100., Assume that m=2, hewill invest 2X($10060) or $80 in stocks and save $20. Ifthe market drops by 10%, his stock investment will be worth$72 and his total wealth will be $92 ($72 stocks and $20savings). Based on the formula, his stock investment shouldbe reduced to 2X($92$60)or $64. Thus, he has to sell $8worth of stocks and put the money into savings. In essence, you sell stocks as they fall and buy stocks asthey rise (many like to put it as 39。, it is a strategy that is very suitable fortrending market. The strategy also gives downside protectionbecause when the investor39。Buy amp。stime.
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