The Definitive Guide to Measuring Marketing Performance, Essay Example

Analyze the various types of returns that were introduced this week and how we can measure the risk of an investment. What is the issue with having two investments that have the same average return but different levels of risk? Reflecting on recent events, what is your opinion about using historical returns as a basis for forecasting future returns? What alternatives would you propose?

There are two primary types of investment returns that have been discussed in the lessons for the week. One of which is that of the income component which is basically the resulting profit that has been earned from the amount that has been submitted for investment kept and saved within a specific span of time. The other type of return is that of the capital appreciation component. This type of return is characterized by the condition by which the capital amount of the investment is doubled or tripled within a specific target of time. Relatively though, both returns come from the determination of the behavior of cash flow in the market and the effect that time has on the said points of investment. Practically, investors know of the fact that these points of return from their assets would only be realizable based on the considerable attention to the risks that are involved in managing the assets that have been used by the organization accordingly.

In cases when an investor enrolls a particular investment in two separate policies with two very unique risks, managing the balance between these investments would almost be impossible.  Noticeably, these investments might create a differential point of return that would not be easy to manage or balance on the part of the investor’s desire to manage a definite source of empowerment that he gets from increasing the value of the asset he has invested in the first place. Nonetheless, there are also some benefits to this investment setup especially that the amount of the asset invested into the policies are to gain returns depending on the management of the procedures of interest rate directives.

In instances when investors opt to enroll their invested assets in several policies that are directed to create a more distinct sense of improving the company’s capital resources, it is important to understand how to use historical investment data in order to forecast future returns. Most likely, through creating a patterned understanding of the past performance of the investment, investment managers would be able to construct a definite outline or blueprint of possibilities that are sure to create a practically extensive pattern of development that could make it easier for business owners to benefit more from what they have invested so far. Through time, it has been realized by investment managers that historical data is something that needs to be fully accounted for.it is through this data-development and observation that the capacity of the investment to provide the expected benefits for the organization or the individual to which the investment has been made for.

Periodical returns are also measured through time and historical data is what makes such concept of investment value more valid for recognition and realization. Most often than not, it is the insistence for the realization of such value that investors become interested in carrying on the option of investing in different policies with constructively different percentage of risk. Noticeably, it could be understood that it is with such aspect of development that the investors become more open to risks especially when they know the type of management that would best provide the most competent source of confidence which would improve the way the investment gain as much profit from the current cash flow behavior existing in the general economy.

References

Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance. Upper Saddle River, New Jersey: Pearson Education, Inc

Strong, Robert (2009). Portfolio construction, management, and protection. Mason, Ohio: South-Western Cengage Learning. p. 527.

Meigs, Walter B. and Robert F. Meigs. Financial Accounting, 4th Edition. New York: McGraw-Hill Book Company, 1970