Stock Vs. Bonds Essay Example | Topics and Well Written Essays - 1500 words

Stock Vs. Bonds - Essay Example However, before delving further into this economic argument it is best to, first of all, understand the definition and composition entailed in the term ‘risk.’ This is because there has been a general misconception and understanding of the term ‘risk’ more so among long-term investors. In this regard, much of the literature regarding the term ‘risk’ is misconstrued and totally misleading to long-term investors. This is somewhat due to the over-reliance and stressing on ‘short-term volatility’ (Nicholson, & Snyder, 2009). According to the definition generally accepted by the investment community and long-term investors, the risk is regarded as the volatility return accrued from an investment in the short term of daily, annual or monthly. Evidently, the measurement of the volatility of returns is either by standard deviation or variance. From this perspective, the definition offered is flawed in relation to a long-term investor for two reasons. Foremost, the conclusions and analysis drawn are reliant on nominal returns while blatantly paying no attention to the erosion of purchasing power instigated by inflation (Nicholson, & Snyder, 2009). In the case of investors in the short term, inflation is not a significant concern but of high impact during the long-term. The second flaw is that the conclusions and analysis drew more than often place an emphasis on the volatility of daily, monthly or annual returns. In the case of many investors, a focus that is based annually maybe more appropriate. However, fo r long-term investors, their concerns should me mostly focused on risks consistent with their long-term wealth parameters and not basically focused on the short-term pitfall along the way (Nicholson, & Snyder, 2009). Evidently, stocks provide higher return potential when compared to bonds. However, they accrue a greater volatility in the process. The major questions arising from this percent are; why do stocks produce more returns when compared to bonds?

Determining causes and effects Essay Example | Topics and Well Written Essays - 750 words

Determining causes and effects - Essay Example It is a fact without doubt that indeed most of the campus students spend a substantive time on campuses leading very stressful lives. Because students have to establish a balance between their studies, examinations, extra-curriculum activities, and some work, it is clearly an aspect of stress. Ideally, stress permeates from numerous aspects in the society, with stress among the teenagers, most especially in those in campus taking the greatest percentage. Despite the fact that stress has become part of human life, stress could be minimized through numerous ways. Indeed, stress in colleges and many teenagers is a significant problem considering the effects associated with it. Based on such a perspective, this paper discusses pressure of academic performance and finances as the causes of stress on college students, and a look into their effects. Stress among college students results from numerous causes, each of which has different effects depending on the circumstances involved. Of all the causes, the pressure of the academic problem is usually the greatest contributing factor to the numerous instances of stress among the campus students (Heidenreich, 2009). Whenever every student goes to campus, one of the primary requirements of the teenager is to perform excellently in the academics. Equally, parents usually encourage their children to have the best of performance in their studies. However, little is always told on how to achieve the academic excellence status.