
SFU-009 - Module 4 (Model answer)
Springpod Team
Created on September 17, 2024
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Transcript
Preparation Task (10 minutes)
Research Task (30 minutes)
Analysis Task (30 minutes)
Create Task (20 minutes)
Hear from a professional in this role to see how they might approach this task.Below is a detailed model answer for the work simulation on Investment Advisory, geared towards a student interested in becoming an Investment Manager.
Document and Present (15 minutes)
Reflection Task (10 minutes)
Expected Outcome
Model Answer
Simulation
PREPaRAtion task
Step 1 - Investor Profile
Preparation Task
I created a profile for a hypothetical client, a 45-year-old professional who wants to build a diversified investment portfolio. The client is a moderate risk-taker, aims for long-term capital appreciation, and has an investment horizon of 15 years. The client has a sizable initial investment amount and plans to invest a fixed amount every year.
Simulation
research task
Step 2 - Investment Options
Research Task
I conducted research on potential investment avenues, including:
- Equity Market: Given the long-term investment horizon, investing in the equity market could be beneficial as it tends to offer high returns in the long run.
- Bonds: Bonds can provide a stable income stream and add security to the portfolio, offsetting potential losses from other higher-risk investments.
- Mutual funds: A combination of equity and debt funds can provide balance, diversification, and risk management.
- Real estate: Not more than 15% of the portfolio should be allocated towards real estate as it is illiquid and requires high initial investment.
Simulation
Analysis Task
Step 3 - Asset Allocation
Analysis Task
Based on the client's moderate risk tolerance and desire for long-term capital appreciation, I divided the investment as follows -
- 40% in equities
- 30% in bonds
- 20% in mutual funds
- 10% in real estate.
Simulation
create Task
Step 4 - Investment Advisory Document
Create Task
I created an investment advisory, which included the client's profile, explanation of the chosen investments, and the potential returns. I also noted that, because of the client's investment horizon and risk preference, this portfolio optimises return potential while providing stability and risk distribution.
Simulation
Document and Present
Step 5 - The Investment Plan
Document and Present
I compiled the research and recommendations into a comprehensive yet succinct presentation to present to the hypothetical client. I made sure the presentation was easily understandable, visually engaging, and effective in communicating the investment strategy.
Simulation
REFLECTION
Step 6 - Reflection
Reflection Task
Reflecting on the process, I was able to practise making strategic decisions based on the client's risk tolerance, investment horizon, and financial goals. The activity gave me hands-on experience about how to give comprehensive investment advisory and how to adapt the plan according to the client's needs.
Simulation
Expected outcome
The completion of this activity gave me an in-depth understanding of the factors that affect investment recommendations. It allowed me to create a customised investment plan, enhancing my skills in asset allocation, investment analysis, and portfolio management. This practical approach could be beneficial in a career as an Investment Advisor.
Expected Outcome