Question

A) Marta is a graduate from UNLV and is having funds of $500 000 that she inherited from her dad. Discuss 5 investment alternatives that she may consider with the resources available to her Further elaborate as to why these alternatives would be best for her. (20marks)

B) What possible 5 common errors in investment management should Marta be aware of?

Total for each question 20

Answer 1

A) five investment alternative she may consider are as follows-

I. She can look to invest into the the index fund if she wants to have an passive investment and she does not want to track the markets much and she wants to have a longer time horizon so she can invest into the index fund in order to have a better passive management of the portfolio.

II. she can invest in the stock and equities, if she is good at selecting the stocks and equities and these stocks and equities will always be having an additional risk and a additional return opportunity so she should be allocated to stock also.

III. Bonds are another option to invest in shr wants to have a exposure into the debt instrument and she want and uniform rate of income and lower risk associated with the investment in the market.

Iv. she can even look to invest into the precious metals like gold and silver and other metals if he wants to have a broad based portfolio which will be having an equal diversification into various assets.

V. she can also look to invest into the cryptocurrencies which are the new form of investment vehicle which will be providing with the exceptional rate of return if she can wear with the exceptional risk associated with investment into it.

B. 5 common errors in investment she should be aware of her as follows-

I. she should always try to have her own analysis rather than depending upon the analysis of crowd

II . She should be trying to follow her risk taking ability and not follow the lackluster approach of investment.

III. She should be trying to invest for the longer period of time and not follow the news and short-term investment approach.

IV. She should be trying to find out better entry point and exit point at her risk measurement.

V. her investment should not be behavioral biased and should not be affected by the heuristics.