... Nevertheless, it is possible to achieve an optimal balance between risk and return, where alpha should be high, and beta low, yet still positive. Today, the alpha coefficient is essential for evaluating the effectiveness of actions taken by companies managing investment funds. The alpha coefficient enables the assessment of the average return of a portfolio. Of course, there are numerous other methods, but calculating the alpha coefficient provides the most accurate answer. From a mathematical perspective, it can be confidently stated that it allows for a comparison of the specific ...

... and other global factors. For instance, an economic crisis or recession may lead to decreased profits for companies in nearly all sectors, which in turn affects stock prices and other assets. High inflation erodes your savings and diminishes the real return on investments – money loses purchasing power. Changes in tax legislation or the introduction of new regulations can make certain types of investments less attractive (for example, an increase in tax on income from deposits makes them less profitable)....

... 10-20% of projects can deliver significant profits, while a third of investments fail entirely. Therefore, the manager's responsibility is to identify avenues for returns that can exceed investment amounts by 5-10 times to cover losses from unsuccessful investments. Returns are generally paid to investors once a year, calculated based on the duration of investments and the volume of profits received. It is advisable to invest in projects that are in the early sales stages, as such companies are often deemed viable ...

... Corporate bonds are less liquid, especially those issued by smaller entities. Taxation: Coupon income and gains from the sale of bonds are subject to PIT at a rate of 13%. Mutual Funds and Exchange-Traded Funds (ETFs) Mutual Funds (PIFs) and ETFs allow for investment in a diversified portfolio of bonds or stocks through professional managers. Bond funds: More conservative, providing returns in the range of 15-20% per annum (depending on the type of bonds). Equity funds: Riskier but potentially high-yielding. Some leading PIFs delivered returns of several dozen percent annually—in 2024, specific funds showed returns of 70-100%. ...

... investments heavily depends on the right choice of direction. Useful Tips To choose a pension fund that will wisely manage the investment, several factors should be considered: It is important to understand that the choice of investment direction affects both returns and risks. Before investing, clarifying which tools the fund utilizes is essential. If high-risk operations are involved, it is advisable to refrain from collaboration. The financial organization should diversify risks optimally. Otherwise, the investor may risk losing ...