Introduction
Investment is the process in which one uses resources to generate income or have some gains. Investment strategies are the models that an investor relies on for decision-making. The investment strategy entails the principles that guide an individual or organization to achieve the established goals when allocating capital. The selected method considers the objectives of the investor, risk tolerance level, and future capital needs. Each element is essential when I consider the amount of money I want to invest in forex. I have to ensure that the investment aligns with my goals, my risk tolerance, and whether the capital will be needed for other purposes.
Rate of Return
The investment return is measured in every venture based on the outcomes of an opportunity. The goal of any capital allocation is to generate income or returns for an individual or organization. The return on investment is calculated by dividing the net profit or loss by the cost (Masters et al., 2017). It is expressed as a percentage that compares a venture’s success or profitability level. The rate of return refers to the total returns or losses the investor incurs from a venture. The rate is essential in determining my profitability in forex investments and whether my approach is effective.
Conclusion
The measures are essential in making investment decisions in every opportunity an organization or individual takes. The basic principle of investment is that an increase in the risk of an investment increases the potential for high returns. The principle refers to the tradeoff between risk and return. It is part of the decision-making process for investors where I measure the probability of making high gains when trading forex. I have to determine whether I am willing to tolerate high risk for the sake of high returns from my forex investments.
Reference
Masters, R., Anwar, E., Collins, B., Cookson, R., & Capewell, S. (2017). Return on investment of public health interventions: A systematic review. Journal of Epidemiology and Community Health, 71(8), 827–834.