Australian Financial Market

1.0 Course Objective (200 words) 2.0 Limitations - Short-term Trading Strategies (150 words) 3.0 Introduction to theories 3.1 strong portfolio creation (150 words) Harry Markowitz developed the famous HM shot in early 1950s. One of the focuses of HM theory is to the highest grad choosing the best portfolio. The HM theory suggested investors could mortify the risk of infection of investment by choosing those bears that be not exactly move together. In other words, Markowitz believes a well- diversified portfolio gives better performance than non-diversified coronation portfolios (Markowitz?1959). The HM theory has been widely used over five decades. Chart 1 tells how a diversified portfolio reduces the total risk of investment. [pic] Efficient Market Hypothesis (EMH) is one of the representatives of the classical pecuniary theories. It illustrated most of the market price movements should be in relevancy to all available information (Fama. 1992). As ind icated by the lick truck Strong Form Efficiency, the share price reacts very apace to all the publicly information in an deaf(p) trend (Fama, 1992). The Efficient Market Hypothesis may assists our conclusion devising in the investment portfolio. 3.2 technical analytic thought (150 words) technical foul analysis is adopted to analyse stocks in the portfolio.

Technical analysis is a security analysis that understands the directions or trends of stock pricing as well as forecast the future tense pricing movement. The analysis is based on indicators such as past movement, trending, candle holder shapes, volume of a market, industries or a particu! lar stock. The would indicates are associated with behavioral finance. Behavioral finance is a combinational try out of financial economic science and psychology. It adopts the elements of psychology as important scuttlebutt to finance studies to relieve a lot of reactions beyond the standardized theories and thus reduce serious flaws (Fromlet 2001, 63). Furthermore, in regard of investors irrationality, De Bondt et...If you destiny to get a full essay, order it on our website: OrderCustomPaper.com

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