Liquidity
Liquidity refers to the ability to readily convert investments into cash at a price close to fair market value.
Investors may require ready cash to meet unexpected needs and could be forced to sell their assets at unfavourable terms if the investment plan does not consider their liquidity needs.
Time Horizon
Time horizon refers to the time period between putting funds into an investment and requiring them for use.
A close relationship exists between an investor's time horizon, liquidity needs and ability to take risk.
The shorter the time horizon the harder it would be for an investor to overcome losses.
Tax Concerns
Tax concerns play a very important role in investment planning because, unlike tax-exempt investors, taxable investors are really only concerned with after-tax returns on their portfolios.
Legal and Regulatory Factors
Investors also need to be aware of legal and regulatory factors.
For example, some countries impose a limit on the proportion of equity securities in a pension fund's portfolio.
Unique Circumstances
There may be a number of individual and unusual considerations that affect investors.
For example, many investors may want to exclude certain investments from their portfolios based on personal or socially conscious reasons.
Liquidity refers to the ability to readily convert investments into cash at a price close to fair market value.
Investors may require ready cash to meet unexpected needs and could be forced to sell their assets at unfavourable terms if the investment plan does not consider their liquidity needs.
Time Horizon
Time horizon refers to the time period between putting funds into an investment and requiring them for use.
A close relationship exists between an investor's time horizon, liquidity needs and ability to take risk.
The shorter the time horizon the harder it would be for an investor to overcome losses.
Tax Concerns
Tax concerns play a very important role in investment planning because, unlike tax-exempt investors, taxable investors are really only concerned with after-tax returns on their portfolios.
Legal and Regulatory Factors
Investors also need to be aware of legal and regulatory factors.
For example, some countries impose a limit on the proportion of equity securities in a pension fund's portfolio.
Unique Circumstances
There may be a number of individual and unusual considerations that affect investors.
For example, many investors may want to exclude certain investments from their portfolios based on personal or socially conscious reasons.
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