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Investment analysis and portfolio management

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This explains the reason why the investor might not meet the anticipated annual expenditure in the event that, there is a financial crisis that will hit both portfolios. With this analysis, the state of risk tolerance in this case study is average. Time Horizon In this case, the time horizon is estimated to be short term since, the investor wants to undertake the listed activities before and after graduating. For instance, he plans to purchase a car in April Next year and that will be before graduation. In addition, the investor wants to begin a business after accumulating a sum of 500,000AUD.

The nature of the activities the investor plans to undertake is the foundation of the type of the investment he intends to make. In this case, the estimate period ranges between 2- 6 years. This is because, by the end of five or six years, the investor would accumulate the said amounts for the diverse activities. However, this nature of investments, particularly in the financial markets may not meet the investor’s expectations in terms of profits, since the higher profits margins in the financial markets are well achieved in either medium or long-term investments periods (Mittra & Gassen, 2001).

Liquidity Needs The investor is likely to spend 300000AUD to purchase a car in approximately 13 months time The investor is likely to spend 8000 AUD as travel expense to the US The investor is likely to spend 500,000AUD as starting capital of a business The listed liquidity needs seem to be mandatory for the investor at the specified period, and this implies that, the investor must get the money to finance the needs, without which the investor will be required to make debts and thus he will have not met his liquidity state (Cohen, & Zinbarg, 2007). Legal and regulatory Constraints This will depend on the nature of the business the investor wants to begin.

The legal and regulatory constraints depend on the type of the business. It is notable that, there is no special situations needed in this case study. In essence, every factor attributed to these business transactions is normal. The Micro-economic Milieu In the case of the state of a financial market, the fundamentals are attributed to the forces that cause the changes experienced in the selling prices of the shares.

For instance, the news on GOOGLE’s intention to acquire more shares is a strong force, which will determine the trend of trading. Such news forms the fundamentals of any financial market. In addition, the aspect of micro-economic factors attributed to trendsetters and consumer desire for new and fashionable taste play a fundamental role in influencing the stability of the selling price of shares.

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