You need to imagine that you have borrowed a total of £1,000,000 at 2% interest p.a. in perpetuity and that invested this money with the aim of funding your retirement.
You hold a portfolio with the following 10 investments:
You will be charged commissions/bid–offer spread of 0.25% of the stock’s purchase price.
An Excel worksheet is available on Blackboard to help you keep track of your portfolio and its performance between 1 July 2021 and 31 July 2021.
In the report (1650 words MAX) you will have to
Analyze your portfolio choices from a behavioral perspective and
Evaluate the asset allocation adopted applying the portfolio theory concepts
studied.
Include a discussion of the purpose of the portfolio (i.e. long–term personal retirement savings) and how you believe that your portfolio fulfills the stated aim better than other possible portfolios.
The report must discuss the biases that may have influenced your choice of assets. You must then make explicit reference to portfolio theory and analysis the portfolio allocation.
Indicate how you think that your portfolio performance should be judged or benchmarked over the long–term and address whether the portfolio in its reduced state will serve your retirement goal after paying back the loan with interest.
