STRATEGY ASSIGNMENT
Introduction
Investment strategy mainly guides an investor to invest in a suitable project that given the highest return in the long-term to the investor. lnv’estment strategy involves the decisions of the investors that are dependent on future needs for capital, goals and risk tolerance capacit y of the investors. The risk tolerance abilit y of the investors represents the trend of the return on investment for which the investors prefer to invest in the project. In this context, the study highlights the investment strategies for Mr. John C it y who is a 40-year-old lT consultant.
The concerned research defines the plan and the project in which Mr. John C it y can invest that enables him to redeem his mortgage in 15 years. The asset proportion in terms of dev equities, emerging equities, propen y, and commodities have been analyzed in the study. The calculations of momentu m investing, trend, volatility control, and risk parit y have also been made in this research that shows the most profitable area and project for investment. The concerned research has also provided recommendations for asset allocation by analyzing the principles of asset allocation.
“Analysis of Investment Strategy”
Mr. John Cit y plans to retire at the age of 65 and wants to save for his retirement as mentioned in the case scenario of the research. Analyzing the case study, it has been found that the annual salary of Mr. John is $150000 per annu m and the person is now only 40 years old. The volume of total salary has increased by 2.0°/c every year for inflation. Therefore, the total salary of Mr. City is expected to be “[$150000 + ( ($ l50000*2.0%) ^ 25 }] = $246090.90” at the final year of his retirement. In this context, it has been observed that Mr.
Cit y is expected to bu y a pension scheme that accumulates to $1000000 by the time he retires. As opined by Xing rr o/. (2018), value investing is a preferable way for investors to create a better return where the goal is for the long-term. In other words, investors usually have different goals and perspectives towards their investment and most of the investors have different tactics for fulfilling the goals. In this context, it can be said that Mr. John C it y can follow the growth investing strategy that enables him to make capital appreciation. In the words of Shah rt ‹il. (2017), growth investing refers to the investment strategy that emphasizes capital appreciation for the investors. In this context, the total amount of investment contributes to additional average growth that provides a better return on the total investment investing by the investors.
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