General Instructions for the Investment Proposal

Managing a portfolio is fundamental to this course. Therefore, you have to write two reports regarding your trading activities during the semester. The first report is your investment proposal.

After studying the different type of securities available to investors (chapter 2), how different types of securities work (chapter 3), and how to easily hold well-diversified portfolios (chapter 4), you must design an investment proposal. You can assume the proposal is for your own investment or for a potential client. The proposal should have:

1. Your investment policy statement (IPS). However, for the proposal, you may assume that you do not have this constraint. For example, you can say, the time horizon to start withdrawing funds is ten years. You may use the Investor Profile questionnaire that you did previously in the semester to help you to select the strategy. You do not have to cover in detail all sub items of the IPS. However, make sure to spell out Scope and Purpose, Governance, and Investment, Return and Risk Objectives
2. Your asset allocation. Your asset allocation must be consistent with your investment strategy.
3. Security selection. You may choose any securities you want. However, mutual funds and exchange-traded funds (ETFs) provide a relatively easy way to reach the asset allocation you have chosen. In addition, as part of this assignment, you must include at least five stocks in your portfolio.