Description
The investment planning process between a financial planner and a client is covered in detail. The course covers creating an Investment Policy Statement; the theory of investment management; security valuation; and portfolio management, including the analysis of investment risk and return and portfolio performance evaluation. The course exposes the student to a balanced presentation of both the theoretical and practical aspects of investment management through analysis of a case study in personal investment management.
Learning Objectives
"• Identify and compare the different standards that an advisor managing assets would be held to depending upon whether they were a registered investment adviser (RIA) or a registered representative (RR). • Identify and explain the key elements of an investment policy statement (IPS). • Given a client situation, accurately develop an appropriate IPS for a client. • Analyze historical returns and risk statistics for various asset classes. • Analyze and justify your opinions on the appropriate periods for measuring historical returns, and the sources used. • Research and discuss the importance of correlations when assessing risk in a portfolio. • Given a client situation, accurately develop long-term capital markets expectation inputs used to determine the expected rate of return for a client’s portfolio. • Analyze and then support and justify your capital markets expectations. • Calculate either the security market line (SML) or the capital market line (CML). • Using the capital markets expectations previously developed, accurately develop an asset allocation model and justify allocations recommended in each asset class. • Calculate the Sharpe ratios for both the current and proposed portfolios. • Analyze and critique whether endogenous risk should be taken into account when constructing portfolios. • Accurately analyze, both quantitatively and qualitatively, a client’s portfolio of securities and make appropriate sell/hold decisions. • Analyze, both quantitatively and qualitatively, at least 8 new securities, and accurately recommend new securities for purchase to fully implement the asset allocation. • Prepare a table showing the recommended portfolio, and discuss how the risk/return profile of the portfolio has been improved. • After posting previous work, analyze and meaningfully discuss each other’s asset allocations and investment recommendations. "