Problem
Investments always concern the outlay of some form of capital consisting of time, effort, money, on an asset in hopes of a greater payoff in the future than what was originally put in. For example, an investor may purchase a monetary or non-monetary asset now with the idea that the asset will provide income in the future or will later be sold at a higher price for a reasonably acceptable profit. These assets can be tangible or intangible and therefore can perform differently during changing economic cycles. The term economic cycle refers to the fluctuations of the economy between periods of expansion (growth) and contraction (recession). These cycles are inevitable with a 5 to years period. Understanding the economic cycle can help investors and businesses understand when to make investments and when to pull their money out, as it has a direct impact on everything from stocks and bonds, as well as profits and corporate earnings.
Task
Given the above scenario, as a retail investor or CFO of your company how will you allocate funds in tangible and intangible investment assets for the purpose of safety and growth during the economic cycle? Develop and discuss a risk management system to accomplish your investment goals.