Investment Analysis and Portfolio Management
Added on 2020-05-28
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Investment Analysis and PortfolioManagement
Table of ContentsOverview of types of funds available for investment................................................................4Analysis of Investment Process..................................................................................................5Allocation Decision................................................................................................................5Portfolio Performance Evaluation..........................................................................................6Review Stage..........................................................................................................................7Analysis of performance of investments....................................................................................7Investment plan for 35 year old professional client...............................................................7Chart representing fluctuation in rating of above investment................................................8Portfolio for 65 year old retiree............................................................................................10Recommendations................................................................................................................15References................................................................................................................................18
LIST OF FIGURESFigure 1: Investment Process.....................................................................................................5Figure 2: Chart representing movement in price of Bingo Industries Ltd (BIN. AX)...............8Figure 3: Chart representing movement in price of Web jet Limited........................................8Figure 4 Chart representing movement in price of Class Ltd....................................................9Figure 5: Chart representing fluctuation in Market Price of the shares of AGL Ltd...............10Figure 6: P/E Ratio of AGL Limited and the Industry (Source: AGL Energy Ltd(AGL.AX).Financials. (2018)..................................................................................................11Figure 7: Price Fluctuations in ResMed Inc.............................................................................12Figure 8: P/E Ratio of ResMed. Inc and the Industry (Source: ResMed. Financials. (2018)..13Figure 9: Chart representing fluctuation in Market Price of the shares of Aristocrat Leisure.13Figure 10: P/E Ratio of Aristocrat Leisure and the Industry (Source: P/E Ratio of AristocratLeisure Financials. (2018).......................................................................................................14
OVERVIEW OF TYPES OF FUNDS AVAILABLE FORINVESTMENTA diversified portfolio can assist in protecting wealth from ups and downs of the market.There are usually four major types of investment also known as asset classes, having ownrisks and benefits which are; Cash, fixed rate, shares and property. An investor can directlyinvest in these assets or might prefer a managed fund that can provide various investments. Defensive investments: These investments are focused on producing general income,as opposed to increasing in value. Defensive investments have two types in commonwhich are; cash and fixed interest (Bodie and et al. 2014). Cash investment: It comprises high-interest saving accounts. The major benefit ofcash investment is stability. However, it offers security and is less risky. The value ofcash can reduce; this might take place in the situation of inflation where the cost ofproducts and services increases. For most of the investors, cash investments areappropriate for keeping cash-on-hand for urgencies and expenses and using it as atransaction account. Fixed interest investment: It is inclusive of corporate bonds, government bonds andterm deposits. Deposit allows in earning interest in savings at the same or a slightlyhigh rate compared to a cash account. On the other hand, bonds usually act as loans tocorporate or government, who put them in to sell to investors for a set amount of timeat a determined rate of interest. Chance and Brooks (2015), asserted that risk ofinvestment in bond depends upon company it can be highly risk, stable or low risk,some types can make a deduction in value, by considering this aspect investor canpossibly get less money than they initially paid. Shares: In simple words, a single share shows a single ownership unit in a corporate.When a share is purchased, then the investor becomes a part of company (as an owner)and is entitled to share in future profits. Shares are said to be the growth investments astheir value rises over time. Investor can make money by put these shares into sale for highprices. Chandra and Leong (2016) specified that shares are best complimented wheninvestors want to construct solid funds for medium as well long-term savings goals andhaving a long-investment timeframe. If an investors holds a share, then they might getincome from dividends which are a part of company’s profit been paid to shareholders.
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