This set of notes cover the IEB/DBE topic of Conflict Management. They include pictures and are in-depth notes. These will be a sufficient source to study this section and prepare for your final Business Studies Exam.
Note: These notes are recommended for IEB students - as some information may be...
INVESTMENTS
Investment
• An investment is money saved to make it
grow, creating more money through the use
of capital.
• The fundamental rule when investing is: the
bigger the risk, the bigger the potential
reward/return.
Step 1: Risk profiling
Helps to determine the type of investment options best suited to personal circumstances.
Helps to understand the investors tolerance for risk and if the expected return is acceptable.
The investor will have to consider:
o Investment time frame – longer the investment time horizon, the greater risk you can take.
o Risk – the riskier the investment, the higher the return. It is crucial to diversify your risk. This
also depends on the financial position of the investor.
o Return on investment – if you want high return, more risk must be taken. ROI can be in the
form of income or capital growth.
Step 2: Investment strategies
1. Conservative investment strategy – little to no risk. Focus is on monthly income. Portfolio will
contain bonds, property and cash.
2. Defensive investment strategy – low risk. Some growth in capital but stable monthly income.
Portfolio will consist of bonds, propery, cash and a low weight in equities.
3. Balanced investment strategy – medium risk. Combination of growth and income. Portfolio
will entail investments in shares, property and bonds.
4. Growth investment strategy – high risk. Long term investment for capital growth. Investments
weighing heavily in equities.
1|P a g e
Nikkiwaite2@gmail.com
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