Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Imagine that you are a financial advisor and a client has come to meet with you to review his portfolio's performance over the last year.
Imagine that you are a financial advisor and a client has come to meet with you to review his portfolio's performance over the last year. While the returns of the client's portfolio have matched the market and he is invested in accordance with his risk tolerance, he has heard that some of his friends last year have achieved above market returns due to choosing individual stocks or fund managers and he is upset with you that he has not achieved the same above market returns. He has heard that the 30-year rolling average for the S&P 500 is 10% and believes his portfolio should achieve that or higher each year. The client has 50% of his portfolio in his own tech company's stock, and he is extremely hesitant to diversify. During the meeting you see the client constantly checking his phone to look at stock prices. Additionally, the client is seriously considering quitting his job with the larger company, withdrawing 50% of the diversified portfolio he has with you, and using his time, money, and effort to start a brand-new software business. Based on what you have learned from Kahneman, write a 1,000-word letter to the client advising him on how he should think about his portfolio, what to do with his concentrated stock, how often he should check his stock prices, and whether or not to quit his job and start a new company. As the client has not read the book, some summary will be required, but better papers will focus on application of concepts in the book to the client's situation and use the concepts to provide advice to the client. Please put concepts in your own words that your client would understand and try to avoid quoting the book at length. As with all papers please upload to canvas in MS Word format by the deadline so that I can easily make edits and comments
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started