Nishat
Taslin Mohona
Session:
2017-2018
Banking
and Insurance
Many
of us are known about Investment and its strategies some of are very usual. But
unaware about how we need to manage the investment and in terms of investment
how their behavior would be. So, here we put light on the behavior of
investors. Before going on, one needs to understand two things. First one is
passive management and the second one is active management.
Now,
passive management is to manage investment in a traditional way. It trends
depending on past results and past methods. Research and development are hardly
followed here. Active management is a sophisticated way to manage investment
where the manager depends on analytical research, forecast, applying his own
judgment and experience. It’s a creative and innovative way. It’s expensive as
well.
Now focusing on the main fact, what is FARMER
and HUNTER in investment? Farmers generally work in a boundary, where they have
specific types of risks. Normally they know how to deal with this risk. That’s
why farmers reflect on passive management. Haunting is generally considered as
a risky job where a hunter needs to go beyond the boundary. They hunt outside
applying their experience, analytical research and judgment. They can't rely on
previous outcomes or events.
Why
is hunting better in investments? Investors who don't apply much effort on
investment and rely on past events will not be beneficial much. Because humans
can’t see the future, what we can do is to predict. This prediction needs to be
based on research. When an investor implements passive management, it becomes
more certain for maximum profitability. There will be ups and downs. But who is
able to hunt more will win in the end. Thus, investors can beat the average
Investor.
