Pension Investment Essay Example | Topics and Well Written Essays - 1500 words

Pension Investment - Essay Example Personal investment decisions are made in the context of wider economic, social, economic and policy. In addition, ethics and regulation are known to have a significant impact on the structure of distinct investment products and the nature of distinct investment plans and strategies. More so, personal investment decisions should be based on a number of factors outside an individual control such as setting of interests by financial institutions like banks and inflation and other factors within an individual control such as making choices about the mix of assets that a person holds (Mazzucato et al, 2010 p. 53). All financial planning demands or requires a comprehension of how domestic or local context-in this case a person’s particular situation – is part of broader context incorporating the role of government and economy. It is rational to argue that at some particular point in life, an individual will save. By not using our money in the present, saving gives us an oppo rtunity to set aside resources for the future. People all over the world save differently depending on their vulnerability to unexpected changes in economic and personal conditions (Fabozzi, 1997 p. 45). Governments in the world encourage their citizens to save and cease the act of utilizing their money in present times because there are times when things change in both wider society and at personal level. Gillani’s investors should provide him with necessary financial information in order to help him implement effective financial education programs such as choosing the best method to invest in depending on the performance of economy and the interest rates that financial institutions charge. Gillani will benefit from his financial knowledge in the sense that he be in a position to attend one on one counseling sessions on his personal savings or finances thus making have lower debts and fewer delinquencies. It is important to note that risks can be calculated in the sense that people can assign possibilities or probabilities to likely future changes such as on the grounds of how results happened in the past. For example, if shares in the past have earned higher returns than bonds, then, people can assume that they will do so in the future. This kind of calculation is uncertainty that is generated by social and economic changes. The financial services sells financial products such a unit trust, life funds, saving accounts and pensions are the main products for personal savings or investments. . Investors make decisions based on information available to produce markets that price effectively. In order to make future investments, individuals must take risks considering that shares and stock are more risky to invest in but in the long run, they have higher returns than cash and bonds. It is also vital for Gillian to know that investors need to be assured that financial institutions such as banks are sane and that financial advisors and providers are acting i n an ethical or moral way. This is attained via formal ways of regulation and that financial services bodies own ethical codes and practices (Fabozzi, 1997 p. 73). These codes of ethics are engineered in the context of government policies that focus to regulate the domestic and international economy in pursuit