Examination the London Stock Market for Investment

The aim of the paper is to analyse the London stock market in order to identify the most preferable financial asset for investment. In addition to this, it helps to identify the risk associated with each of the financial assets. The risk involved in portfolio investment is directly linked with the value. The willingness of an individual make an investment or avoid risk is the most important factor for portfolio investment (Reilly &amp. Brown, 2011). The investment portfolio has to be made in such a manner that maximum return can be earned from financial assets. The investment portfolio has been based from Monday 2nd March 2015 to Monday 6th April 2015. The major aim of investment in financial assets is to earn a return and maximise profitability. Moreover, portfolio investment is considered to be the safest mean of earning income. The total amount fixed for portfolio investment is £100,000 (Reilly &amp. Brown, 2011).
The paper analyses the current market trend and the risk involved with each of the financial assets that have the potential to prevent investments. Apart from risk other factors that have the potential to affect investment in financial assets include the amount invested and the expected length for which an individual holds different financial assets. The time horizon defines the time period between the investment in financial assets and receiving the return from it. The time length is considered to be the crucial factor in portfolio investment because it directly affects the ability of investors to minimise the overall risk involved. The paper analyses the financial market according to the data of the London stock exchange and identifies the assets from which the borrower can achieve maximum return with respect to the risk involved.
Investment theory focuses on the process of decision making associated with selecting the appropriate financial assets for investment that in turn has the potential to maximise the overall return earned. Investment theory defines the relation between the risk involved in investment and overall return from the financial assets.