Posted: September 22nd, 2016

Select the specific securities (bonds, equities or other) that you will recommend the client purchase with his or her funds

Step 5: Pick specific securities (three to six A4 pages)
• Select the specific securities (bonds, equities or other) that you will recommend the client purchase with his or her funds.
• Can you purchase specific bonds that mature at the time that funds are required? Explain to the client what this does to the risk of the portfolio.
• Outline the criteria that you have used to select the securities. This should include an assessment of things such as the P/E ratio, the shape of the yield curve and current price of risk in the market.
• The securities selection should be consistent with the asset allocation decided in Step 3. Any changes in the asset allocation that have been considered should lead to some change in the composition of the securities held. If you have outlined some potential for changes in the asset allocation, you may want to also recommend changes in specific securities that would accompany these adjustments.
• You may want to look at funds. Which funds will you choose? How will you make the selection? What are the costs that you will have to pay to invest in these funds? What are the costs and benefits of using funds rather than your own judgement?
• Some parts of this chapter may be left to Week 7, when we look more closely at the analysis of equities.
Chapter 5
Step 6: Finalise document and write executive summary (around 5,000 words; 20–30 A4 pages for the main body of the report)
• Make amendments to the overall document. Now is the time to finalise the selection of particular bonds and equities for the portfolio.
• Try to ensure that all the components are consistent.
• The format should be professional, both in prose and in visual format.
• When you refer to an article or book, use the Harvard Liverpool Referencing System. Please remember to include apposite citations from peer-reviewed journal articles (from our online library).
• Extract and share your most important elements for your executive summary, and remember to include an Index and end references list