You must choose one of 4 investment vehicles (Individual stocks, managed mutual funds, real estate, or treasury bills) to place in your retirement plan. Use the concepts from chapter 19 to determine which of the 4 investment choices would be right for you. First determine how risk averse you are and what your utility curve will look like. You should research historical average investment returns for each type of investment vehicle when you make your decision. You should also determine the risk of loss from the chosen investment vehicle. What method would you use to reduce your risk of a loss if any? List one behavioral bias that may complicate your choice. How much do you think your portfolio will grow in the next 30 years if you made a one time $10,000 investment? Compare your returns to the returns of an index fund. Use the matrix below to direct your response. (Limit your response to no less or more than 1 page using word)
Use this future value formula to calculate your return after 30 years: FV = PV(1+r)^30
FV = Value of your investment after 30 years
r = annual return
PV = Initial investment = $10,000