Investment Essay Example | Topics and Well Written Essays - 3250 words

Investment - Essay Example It has often been said that some investment types such as unit trusts are more profitable as compared others such as open ended investment companies (Atrill & Elliot 2005). In this paper we critically review this assertion by looking at literature on the subject of different investment types. The paper begins by providing an overview on the various investment types and afterwards concentrates on evaluating which one is a better investment vehicle by weighing their advantages and disadvantages with respect to their various tax implications. The rest of the paper is organised as follows: section 2 presents an overview of the various investment types focusing on their advantages and disadvantages as an investment vehicle; section 3 provides an overview of these same investment types but this time paying attention on their various tax implication, section 4 presents a brief summary of both investment vehicles as well as some empirical evidence on the performance of some of these investme nts; while the last section presents some concluding remarks. In finance, Investors typically faced two challenging questions. How much to invest? And where to invest (Berlin & Lexa 2005, Brealey & Myers 2005). These are some of the pertinent issues this paper seeks to address. By examining the various investment options available to potential investors. By the end of this paper, we intend to make important conclusion and recommendation as to the best investment option. 2.0 Types of investment products with advantages and disadvantages Globalisation, the new information technology, and deregulation of financial markets have eased not only the provision and search of finance but investment opportunities open to investors. Millions of shares are traded every day on the world's stock markets. (Penman, 2003). Investors who trade on these stocks are often forced to ask themselves whether they are buying or selling at the right price. (Penman, 2003). They often attempt to provide answers to these questions by turning to various media including internet chat rooms, printed press, "talking heads" on television and financial networks, who often voice opinions on what they feel the stock prices should be. (Penman, 2003). In addition, investors consult investment analysts who provide an almost endless stream of information and recommendations investment options opened to them to sort out. There are often claims that some shares are undervalued and vice versa. (Penman, 2003, Shapiro 2003, Ross et al. 1999). This information pertaining to the various investment options at times becomes confusing leaving the investor with no clear indication of what the