Outline Of Proposal For The Investment Challenge

Advisors and investors would do well to pay as much attention to the expected volatility of any portfolio or investment as they do to anticipated returns. Moreover, all things being equal, a new investment should only be added to a portfolio when it either reduces the expected risk for a targeted level of returns, or when it boosts expected portfolio returns without adding additional risk, as measured by the expected standard deviation of those returns. Lesson 2: Don’t assume bonds or international stocks offer adequate portfolio diversification. As the world’s financial markets become more closely correlated, bonds and foreign stocks may not provide adequate portfolio diversification. Instead, advisors may want to recommend that suitable investors add modest exposure to nontraditional investments such as hedge funds, private equity and real assets. Such exposure may bolster portfolio returns, while reducing overall risk, depending on how it is structured. Lesson 3: Be disciplined in adhering to asset allocation targets. The long-term benefits of portfolio diversification will only be realized if investors are disciplined in adhering to asset allocation guidelines. For this reason, it is recommended that advisors regularly revisit portfolio allocations and rebalance

“The Benefits of diversification are clear. Portfolio theory has played a crucial role in explaining the relationship between risk and return where more than one investment is held. It also enables us to identify optimal and efficient portfolios.”

Investing behavior should be driven by information, analysis, and self-discipline, not by emotion or ‘hunch.’

Three new potential strategies are tested by using the model of Johnson and Scholes, and one proper strategy will be retained to carry out an Action Plan.

In order to succeed in any business, it is extremely important to understand the stock market. In this assignment we were asked to follow the stock market continuously for four months and understand the market. The stock market is a global marketplace, where goods and services are traded in the form of equities.

Our approach is an active security selection with passive asset allocation. We invest heavily in common stocks, but vary our holdings to include companies of all sizes and industry groups. We seek to achieve sufficient diversification by abstaining from investing more than 5% of the total assets in a single security unless it has significant upside potential, and we make an exception for ETFs and index funds as they represent a basket of securities. Our main goal is to identify and invest in common stocks with high potential for both short- and long-term capital appreciation. Our secondary goal is to invest in common stocks with steady income. When potential for rewards are high, we also enter into derivative

“Financial Statements…provide key information for internal and external decision making.” (Horgren, et al., 2015). Through analysis of the financial information of both JB Hi-Fi and Dicksmith, I have found that investing within JB Hi-fi would be a more profitable and beneficial for shareholders. Moreover not only does JB hi-fi’s financial information (Appendix 1) show that return on Shareholder’s equity is close to 48% of each dollar

Dividends should be made cumulative and issuable upon a liquidation event or an IPO. Such dividends may be converted, if the holder desires, to common shares. This will encourage management to seek a quicker exit.

Explain why investors may be attracted to high-risk investments such as exchange-traded derivatives, global funds, and other complex investment vehicles.

With outstanding projections by Apple my recommended strategy is simple and involves options. Reason being is that orthodox investments do not provide great returns in a volatile market. Therefore, by evaluating apple

The learning objectives for students in this course are: (l) improve your understanding of financial securities and markets, (2) develop the ability to analyze investment companies, common stocks, and bonds for investment decisions, (3) understand how options are

The Viking negotiation was quite tasking in the sense that it was tough to try to figure out a solution because both sides were in a bad situation financially, and the amount of options to solve the problem were very limited. From the beginning we just talked about the scenario in a open, friendly way to see what each side had to say about the situation. We discussed each problem at hand and what each side wanted, so we had some idea of what kind of solution we could try to come up with. When we found out that the things we wanted would not be able to yield a pleasant solution for any party. I knew at this point someone would

Diversification is a method of investing that been shown to increase portfolio return while reducing portfolio risk as measured by standard deviation. This method specifically increases the efficient frontier for investors. The challenge to an investing firm is an appetite by its customers for an ever increasing efficient frontier. One area to explore to obtain this increase is through further diversifying through international diversification.

Personal investment is defined as an individual invest and manage their own financial instrument, such as, stocks, bonds, property and others. This personal investment is in aims of improve the liquidity and efficiency of the equity and capital of the individual. Basically, the individual investors have to develop their own investment plan and framework based on different characteristics of the individual investors. This is because the personal investment is very subjective, whereby it is totally based on the characteristics and the degree of risk tolerance of the individual investors. However, before investing into the financial instruments, the individual investors should develop an investment plan and strategy. This

Diversification, as a risk management means, mainly concerns the alteration and experimentation of various kinds of investments that are included in a specified portfolio. The reason why it is the usual practice is because a certain portfolio is mostly inclusive of different investments that can bring about higher profits as a relatively lower risk of stand-alone investments within the similar or