Portfolio Investment Strategy - Investment brief for wealthy private customer

Content

Tables

Abbreviations

1. Terms of Reference
1.1. Underlying Assumptions

2. Asset Categories
2.1. Equities
2.2. Bonds
2.3. Property
2.4. Cash

3. 3. Risk and Return
3.1. Risk and Return Trade-off
3.2. Personal Risk Tolerance
3.3. Risk Adjustment, Measurement and Analysis

4. Portfolio Management Techniques
4.1 Active Management Approach
4.1.1 Technical Analysis
4.1.2 Fundamental Analysis
4.2 Passive Management Approach
4.3 Explanatory Statement of our Choice

5. Investment Recommendation
5.1. Asset Allocation
5.2. Expected Returns
5.3. Hedging Tools
5.4. Behavioural Approach

6. Compendium

7. Bibliography
7.1. Additional Reading
7.2. Reference List

Tables

Table 1: Mr. Gorham’s Investment Background

Table 2: Asset Categories in Comparison (fluctuation displayed)

Table 3: Finding the appropriate Investment

Table 4: Comparison of Management Approaches

Table 5: Compendium of Returns on Investment

Abbreviations

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1. Terms of Reference

This investment recommendation is made due to your recent request to provide you, Mr. Gorham an optimal investment strategy.

1.1. Underlying Assumptions

The report and its tailor made advice on a certain investment strategy are based on your personal evaluation and backgrounds, provided during our meeting in March 2006.

Table 1: Mr. Gorham’s Investment Background

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2. Asset Categories

Regarding capital appreciation as you major investment objective, your portfolio will consist of an appropriate mix of securitized assets. To achieve maximal capital appreciation due to your medium-risk tolerance level it is necessary to analyze the different asset categories used, to maintain risk-reward comparisons. During the allocation of the portfolio’s asset categories, a compromise is needed to between maximum return and risk avoidance.

Table 2: Asset Categories in Comparison (fluctuation displayed)

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Source: PIS Handout and own research

2.1. Equities

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