Blog #7 Investors buy into GM’s return

http://www.theglobeandmail.com/report-on-business/investors-buy-into-gms-return/article1804021/

I never really quite understood how investments work, how people could put so much money into a risky venture that may or may not return a reward for you, at even worse, let you lose it all. As GM returns itself into the automobile market in the United States, hundreds of fund managers bought a chunk of the GM Co. shares. Many of them believed that this will be a start to rebuilding the decreasing sales of US automobile companies. However, there were also people who were uncertain about the security of investing into GM. They say that that risk is too expensive, and they would not invest into this.

The returns of an investment are always risky, as they are not known ahead of time: they are just random variables. In this case, with the competitive market in the automobile industry, especially with Asian competitors such as Toyota and Honda, it seems like a very risky investment, although, they seems to be a growing renewed confidence in the United States automaker.

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