The Stock Market

Discussion in 'Economics' started by eassam, May 9, 2005.

  1. eassam


    I got this plz help!

    You are a financial advisor employed by a well-respected firm of stockbrokers, Krook and Dodgy. A large lotto winner, Sheryl, has approached your firm for advice on what to do with her winnings. Sheryl is in her early forties, has three teenage children, is divorced and is a part-time shop assistant. She is hoping to gain a secure source of income to supplement her meager wages and to help pay for children's education at school and University. However, she is also concernced that her low wages have prevented her from making adequate provision for her financial security when she retires.

    Your company's policy is that each potienal client should receive a personalized "Investment-Brief" which takes their circumstances into account, while providing them with the information neccessary to make an informed decision about the purchase of assests to best met their financial goals.

    The Task:
    Write an investment brief for Sheryl's circumstances. Include the following information.

    1. A brief summary of the types of assests that she could purchase.
    2. An outlinge of the different risk categories for equity assests(shares)
    3. An explanation of the key principles used to reduce risk and maximise return from assests purchased when putting together an assest portfolio.
    4. the current market situation for equit assests(with factual supporting evidence)
    5. your recommendations for:
    the types of assests she could purchase (including specific, examples)
    te proportion of her winnings she could allocate to, and within, each assest type
    the approach she take to purchasing equity assests
    6. The reason(s) for each of your recommendations, including information to support your conclusions.
  2. danielc1


    I need more information to be compleat:

    How much has she won?
    And how much of homework does she wants in regards of her investments?
    Does she need money right away?

    Here are already a few pointers:

    (I'm in the understanding that she doesn't need money right away and that she doesn't want to do anything 'active' for her investments.)

    Small caps 15%
    European stock 15%
    Pacific stock 15%
    Emerging market 10%
    Short term bonds 10%
    Inflation protected securities 10%
    Gold, silver, platinum, 5%
    commodities 10%
    High Yield funds 10%

    The key principle for reducing risk is asset allocation and some money management algorithm for the stockportfollio in the total portfolio. maximizing return exits out of selecting the right stock market in the world trough a model that identifies current trends. (An example is Germany and the Austrian stockmarkets.) I can not go in detail here on the internet, but in the letter I would explain how it would be done.
    Explanation of current market situation is not important, because it would only give a picture from a moment that is already in the past. But you can put up any picture you want and find any evidence that will support it. I only would be very careful to conclude a future direction out of it... If you say in your rapport that we are in a bull market and you find the evidence to support it. What will your client think when the market is going down in the coming months? All though that this will have little to no effect to the return of the portfolio...
    The reason for this recommendation is that this is a time tested model that will give here a piece of mind. Asset allocation gives you an edge that is not possible with all the stock picking and market timing in the world.
    I doubt that you get a full size rapport from anyone of us, here on Elitetrader. What you are asking cost money and time...

    Greetings Daniel.
  3. eassam


    thanks for ur help man!

    but can u give me more info about this?

    this is what i got as an assignment!
  4. MTE



    This sounds like an assignment/project I did in one of the Finance units when I was at the University.

    You should really do your own work, besides Daniel is right, you're asking for someone to write up a whole report for you, whcih takes a lot of time and effort and eventually money.
  5. LaSalle


    Just do a google search on 'modern portfolio theory', 'efficient frontier' or something similar.
  6. eassam


    then can u plz help me out?
  7. eassam


    it wud be grateful if sum1 writes a report up for me!!
    time wud be long but how wud money be involved?
  8. MTE


    Haven't you learnt anything!? Time is money! :D
  9. LaSalle


    Asking $500. What's the bid?
  10. chartie


    3% of Sheryl's winning lotto :p
    #10     May 9, 2005