My Profession as a Stock Trader Annotated Bibliography

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MyProfession as a Stock Trader: Annotated Bibliography

Bikker,A., Broeders, W., and Dreu, J. “Stock market performance andpension fund investment policy: Rebalancing, free float, or markettiming? InternationalJournal of Ventra Banking6.2 (2010): 53-79. Print.

Thearticle addresses the issue of balancing between different componentsof a pension plan investment. The main concern of the authors iswhether the right investment decision should be guided by the timingor a balance between the different components of the portfolio. Theauthors argue that stock is safe when invested in the long. They useliterature review methodology that limits their ability to assess thequality of data used by the previous scholars. However, the articleprovides useful information that will be used to explain that,although the issue of establishing the balance between the bond andstock can enhance financial safety, pension plan agencies andindividual retirees should not fear stocks because they are safe inthe long run.

Bodie,Z. “Mismatch risk, government guarantees, and financialinstability: The case of the U.S. pension system”. InternationalJournal of Central Banking8.1 (2012): 274-283. Print.

Bodiediscusses the significance of matching the assets versus theliabilities when making investment decisions for the pension plan.The author holds that many retirees and pension plan agencies (suchas local governments) make mistakes after failing to establish thebalance between the amount of assets and liabilities. For example,Bodie identified that pension plan agencies avoid the stocks becausethey believe that they are risky. However, the risk associated withstocks is very limited when one intends to make a long-terminvestment, such as a contribution to the pension plan. The authorsreviewed the articles published by other scholars, which made itpossible to identify trends regarding the issue of investment instocks. Therefore, the article is useful and it will be used toadvance the argument that stocks are safe when used as the pensionplan contribution.

Cohen,A. and Levine, G. “In-kind contributions to defined benefit plans:An introduction”. TaxManagement Compensation Planning Journal1 (2012): 1-6. Print.

Thearticle provides a discussion of the use of stock as a component ofthe pension plan. The authors classify the employer provided stock asa contribution in kind, which is the opposite of a cash contribution.They oppose the idea of using the stock as a retirement plan becausethe market turmoil associated with the modern business environmenthas made companies more volatile than in the past. This has increasedthe risk of stock since companies that give shares as a retirementcontribution are volatile. The article is a credible source that isbased on a review of literature, which allowed the authors toidentify trends related to the inclusion of stock in the retirementinvestment portfolio. The article is a useful source that will beused to show the disadvantages of considering investment in-kind whenmaking pension plan decision.

Jones,A. “When do companies fund theory defined benefit pension plans?”Accountingand Taxation6.1 (2014): 13-23. Print.

Jonesaddresses trends in the area of pension, with the main focus on theinvestment in stock versus bonds. Jones argues that investment instock as part of the pension plan was more viable until early 2000swhen the share market was strong. Since then, the market has becomemore volatile, which implies that people who depend on stock as theirpension during the old age could suffer loss. The article is acredible source that is based on a longitudinal study design, whichallowed the authors to analyze trends over time. Although the studydesign enabled the researchers to show varying patterns, it increasedthe cost as well as the length of time taken to conduct the research.The article will be used to explain that the stock market has becomeincreasingly volatile, which has made it risky to invest in equity aspart of the pension plan.

Lingaraja,K., Selvam, M., Vasanth, V. and Ramkumar, R. “Long-run overseasportfolio diversification benefits and opportunities of Asianemerging stock markets and developed markets”. InternationalJournal of Economics and Finance Issues,5.2 (2015): 324-333. Print.

Theauthors introduce another aspect of diversifying the stockinvestment, instead of mixing shares with bonds. Shares are the bestoption for long-term investment because their value is likely toincrease over time. Therefore, investors cannot compare the value tostock and bond when the duration of investment is long. The authorsuse the case study design to analyze the benefits of expanding theportfolio of shares in the Asian market. The design enhancedflexibility of the study, but it limited the generalizability of thefindings. However, the content of the article is useful and it willhelp in illustrating how investing in stocks in long-term plans (suchas the pension) is important.

Malkiel,G. “Retirement readiness and behavioral finance”. Journalof Investment Management13.3 (2015): 1-11. Print.

Malkieladdresses the key issues that people should consider when makingdecisions regarding the investment for the purposes of enhancingtheir financial security during the old age. The increase in thenumber of the baby boomers who are retiring every year has broughtthe issue of correct investment decisions to the attention of thestakeholders. This is because a large number of the retirees made thewrong investment decisions. Malkiel holds that investing in stockoptions with the objective of enhancing financial security afterretirement involves a lot of costs (such as explicit charges for themanagement and administrative expenses) that reduces the benefits inthe long-run. The article is based on a review of literature thatlimited the ability of the author to assess the quality of data usedin the previous sources. However, it is a credible source that willbe used to discuss the costs of investing in stocks.

Oliver,J. What John Oliver learned while setting up a 401 (k) plan for hisemployees? MarketWatch.18 June. 2016. Web. 7 August 2016.

Oliver’svideo provides the analysis of the 401 retirement plan. Oliver warnsthe audience that everyone can claim to be a financial adviser, butthey should be cautious because not all people will help them investin the right portfolio. Oliver advises his audience to invest instock as part of the retirement plan. However, they shouldcontinually reduce the amount that they invest in stocks andincreases the funds directed towards bonds as they get older. This isbecause bonds are safer since debtors are given a priority over theequity holders. Although the video could contain some bias, itcontains the expert’s opinion. The video is a useful source thatcontains basic information that an investor should have in order toweigh between stock and bonds when making investment decisions.

Workscited

Bikker,A., Broeders, W., and Dreu, J. “Stock market performance andpension fund investment policy: Rebalancing, free float, or markettiming? InternationalJournal of Ventra Banking6.2 (2010): 53-79. Print.

Bodie,Z. “Mismatch risk, government guarantees, and financialinstability: The case of the U.S. pension system”. InternationalJournal of Central Banking8.1 (2012): 274-283. Print.

Cohen,A. and Levine, G. “In-kind contributions to defined benefit plans:An introduction”. TaxManagement Compensation Planning Journal1 (2012): 1-6. Print.

Jones,A. “When do companies fund theory defined benefit pension plans?”Accountingand Taxation6.1 (2014): 13-23. Print.

Lingaraja,K., Selvam, M., Vasanth, V. and Ramkumar, R. “Long-run overseasportfolio diversification benefits and opportunities of Asianemerging stock markets and developed markets”. InternationalJournal of Economics and Finance Issues,5.2 (2015): 324-333. Print.

Malkiel,G. “Retirement readiness and behavioral finance”. Journalof Investment Management13.3 (2015): 1-11. Print.

Oliver,J. What John Oliver learned while setting up a 401 (k) plan for hisemployees? MarketWatch.18 June. 2016. Web. 7 August 2016.