ipl-logo

Investment Advisors Case Summary

2255 Words10 Pages

1. Please describe the role of an investment advisor? What are the outcomes for a good advisor? In which case the client and the advisor will be in “win-win situation”?

Investment advisors provide clients, which are the individual investors advice on financial matters including financial planning and selling securities and make recommendations on the on ways to best utilize their money. Investment advisors have a hard job because they have to research the market place and advise the clients on products and services that are available and make sure that they are aware of and understand those that best meet their needs and expectations, and at the end they secure a sale. They also have to take in to account the client’s financial resources …show more content…

Diversification is the most important component in reaching long-term financial goals. It is important that investors diversify among different asset classes such as stocks and bonds. This decision is usually made in asset allocation served as the core strategic overlay in providing a benchmark before any further tactical or market timing positioning of securities. Diversification could occur across asset classes and geographically too meaning international stocks, allowing for construction of asset combinations with return and volatility characteristics that are acceptable to many investors with different risk tolerance levels and investment goals. When selecting securities to invest in another way of diversifying is to buy securities in the same asset class that are not affected by the same variables such as grocery stores, airline companies, entertainment companies, technology, they are completely different businesses. Building a portfolio that includes stocks from different sectors, the chances are that one or more will always be doing better than average. When it comes to bonds, investing in a number of government bonds with different times to maturity can reduce risk as well as increase returns. A diversified portfolio will have less volatility and steadier returns …show more content…

It means that the market leads investor’s to make irrational financial decisions. This means that when investors are overconfident they overestimate the market and make exaggerate choices. When an investor is overconfident they think that they have everything it takes to win neglecting all the other investors in the whole market. In the long run it can harm an investors stock picking ability leading them to make high volume trades meaning that they take on more risk at higher prices. This can cause them to lose all of there investments because they think that they are better than others. Some investors make forecasting errors because they give to much weight to recent experiences, they may think that a stock is going high dramatically and may invest there money on it, but a significant fall may cause them to lose out on their investments. Investors can sometimes underreact to recent news (new news) of a firm; they can be too slow on updating their expectations in response to recent data and information. Some investors are the opposite meaning they give too much importance to recent events and information, but we should know that a small sample or data might not be that ideal and representative. We consume wrong information causing us to make wrong financial decisions. Investors

Show More
Related
270 Words | 2 Pages

Not much is revealed about Lewis' background prior to working for Morningside LLC. In the 90's he got a job at LLC working as a building manager for Frank and Sam Morris. Sam Morris eventually hired him set solve problems for him by setting fires in certain buildings. These buildings were either were torched for one of two reasons. One reason was the buildings were owned by Sam and he wanted to get rid a problem (rent strikes, illegal tenants, drug dealers).

Read More
534 Words | 3 Pages

Introduction Blake Goodwin is the CEO of Goodwin Wealth Management. He was deciding to hire a consultant to make an assessment of his situation. Three large companies had expressed interest to acquire Goodwin Wealth Management. In the fall 2007, Ice Financial Income Fund, First Canadian Band, and Brawn Financial Corporation were the potential suitors and they had made offers to acquire the company. Blake Goodwin had to decide whether to sell the company and if he sold it, which buyer was the best one.

Read More
64 Words | 1 Pages

401K Retirement Savings Account is needed for the employees and their families. It is needed because it helps the employee save money towards their retirement before taxes are taken out reducing your tax bill for the current year. As our employee, you have the option to control how your money is being invested through a spread of stock, mutual funds, money markets and etc.

Read More
915 Words | 4 Pages

Case management is a critically important modality in the provision of effective services for individuals who are experiencing difficulty. It is an approach to organising interventions that address the needs and circumstances that significantly impede the life chances of an individual through a collaborative process of assessment, planning, facilitation and advocacy for options and services. There are various forms of case management models and a range of theoretical lenses through which to view human development. However, these models can vary in accordance with the sector in which the dominant or priority issue is located, such as the health sector or the learning and development field. The variation within each of these areas implies that there is much discussion in the literature about the models that are most appropriate and effective for particular client groups, however, for this essay the Brokerage Model and Strengths-Based Model will be the compared models of case management.

Read More
692 Words | 3 Pages

For example, In Document five it states that in 1929, a collapse of the American Prosperity happen. Which means people was putting a lot of their money into securities hoping to the make the stocks rise. People began gambling which made a lot of them go into debt (Harry J. Carman and Harold C. Syrett, A History of the American People, 1952). Also a lot of people were speculating, meaning investors was putting money towards stocks hoping to gain, but risking a loss. By 1931, six million Americans could not find work.

Read More
793 Words | 4 Pages

Attorney Kenneth Feinberg has probably one of the toughest jobs in the world. He is the go to person that people go to when there is a massive death population. His job is to decide the value of the people who were involved in and died in specific events. He bases the worth of an individual based on congress’s requirements which are based on how much an individual would have allocated throughout his/her lifetime had they remained alive. What makes someone qualified to determine the worth of other individuals?

Read More
524 Words | 3 Pages

What Is Really Behind the Decline in Hedge Fund AUM? Hedge funds and Republicans have at least one thing in common—media pundits rarely pass-up an opportunity to take a swipe at them when they falter. And hedge funds have faltered. Hedge fund assets under management (AUM) fell below last year’s hard won $3 trillion dollar high water mark. Many would argue that hedge funds have lost their compass but, such an assessment would be unfair.

Read More
1129 Words | 5 Pages

Outline the similarities and differences between the Single Index Model (SIM) and the Capital Asset Pricing Model (CAPM). Justify which of the two models makes a better assessment of return of a security (25 marks). To reduce a firm’s specific risk or residual risk a portfolio should have negative covariance or rather it should have no variance at all, for large portfolios however calculating variance requires greater and sophisticated computing power. As such, Index models greatly decrease the computations needed to calculate the optimum portfolio. The use of such Index models also eliminates illogical or rather absurd results.

Read More
1217 Words | 5 Pages

The Single Index model (SIM) and the Capital Asset Pricing Model (CAPM) are such models used to calculate the optimum portfolio. Sharpe (1963) defined SIM as an asset pricing model which is purely arithmetical. The returns on a security can be represented as a linear relationship with any economic variable relevant to the security, for example in stocks the single factor is the market return. According to Sharpe the Single index model for return on stocks is shown by the formulae shown below; Rs-Rf = α + β (Rm- Rf) +ε. α or alpha represents abnormal returns for stock.

Read More
1169 Words | 5 Pages

Many people put a lot of faith into the estimates and simplified probabilities given by experts in their field; this also gives us the great ability to confidently produce new estimates for new and more complicated questions introduced by those inevitable roadblocks in financial forecasting. Instead of guessing or using simple probability trees to overcome these road blocks, we can now use Bayes' Theorem if we possess the right information with which to start. (See Analyst Forecasts Spell Disaster For Some Stocks to read about the effects of a bad

Read More
1800 Words | 8 Pages

Introduction Establishing a valid trust, Lord Langdale MR mentioned in Knight v Knight that three certainties were required: certainty of intention, subject matter and objects. Trust is of utmost importance as it imposes a binding obligation on the trustees, which ensure that a trustee can manage a trust properly. In order to advise Hugh on the will that he has previously made, the issue is whether the words used are sufficiently obligatory to impose a trust. Hugh, as a settlor, has the power to appoint benefits during lifetime. Noted that these powers will only vest in the trustees, Kay Oss and Anna Key, after Hugh’s death.

Read More
2131 Words | 9 Pages

If I say that we all are irrational, some of you might defend me say that not all are irrational. But I can prove that all of us have unintentionally been an part of irrational decision making, like not wearing vehicle seat belt because you thought it might spoil your amazing outfit, smoking and drinking alcohol, poor financial decision (buying unnecessary items), not attending a lecture or class, and many more. In a survey conducted in Manhattan 50% of the people had purchased an umbrella for a very high price on rainy day from street vendor. Moreover, 77% of the people said they would purchase an umbrella for a high price on a rainy day if it were necessary. However, 90% of the people will not buy the same umbrella for even half the price if it was a sunny day (Summer, 2012).

Read More
919 Words | 4 Pages

As a result, an asset mix of 30/60/10 would produce the lowest CTE(95) within 10% difference to mean. In the event of optimistic market, since the outcome is favorable and the worst-case scenario is unlikely, a CTE(75) could be a sufficient asset mix. In fact, at CTE(75), an asset mix of 0/70/20 offers the lowest CTE and highest return as a result of higher expected return from equities. In Conclusion, the optimal asset class for Treasuries/Bonds/Equities could be attained at 15/70/15 splits.

Read More
1170 Words | 5 Pages

Firstly, I need to identify the causes and formation of the difficulty situation of my client. I should not involve my own personal emotions when analysing the situation. Next, clarification of the situation is essential. The clients should figure out themselves on how to face the situation. An effective counsellor listen more than talks, and what they do say gives the client a sense of being heard and understood.

Read More
744 Words | 3 Pages

These mistakes are realized only when you go through the same situation as you made them go through. This is necessary to happen as this is when you actually realize your mistake and you know that you will never repeat the same mistake again, as you have also felt the same pain and know the exact consequences of the mistake. Another example of a mistake that hugely affected the people was of the great depression which took place in America. The outcome of living happy go lucky and purchasing things with no cash brought about a sudden fiasco.

Read More

More about Investment Advisors Case Summary

Related Topics

Open Document