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In this Capstone project, you will select one of three different characters (each with their own set of financial constraints and objectives) and create a suitable wealth plan for them over the next five years.
To achieve that goal, you will need to apply what you learned in each of the four previous courses. Indeed, you will need to understand which assets to consider and how to manage them in response to changes in the economic outlook (Course 1), as well as how to evaluate and deal with your character's emotional biases in order to recommend a wealth strategy that they can follow (Course 2), how to build an optimal portfolio and manage its risk once the strategy has been designed (Course 3) and how to adequately measure the performance of your plan while using the investment vehicles and future trends in the investment management industry to further your character's goals (Course 4).
Syllabus :
1. Client Profile
- Welcoming video & project overview
- Client profile - Quick recap - part 1
- Client profile - Quick recap - part 2
- The basic steps in investment
- Cognitive biases when choosing which assets to look at
- Cognitive biases when processing financial information
- Cognitive biases when rebalancing your portfolio
- Cognitive biases when evaluating performance
- Wrap-up
- How our emotions impact our investment decisions
- Why we trade
- What can we learn from this?
- The key things you need to know to define your investment profile - UBS guest speaker
- The path from an investor's profile to his/her optimal investment strategy - UBS guest speaker
- How our age and wealth affect our investment profile - Main views
- How our age and wealth affect our investment profile - Robo-advisors
2. Investment Policy
- Overview of the milestone
- Risk as volatility?
- The risk-return trade-off - UBS guest speaker
- Measuring our risk tolerance
- Distribution of returns - Graphical representation
- Distribution of returns - Numbers
- The impact of correlation - The benefits of diversification
- The impact of correlation - Maximizing diversification
- A first example of an anticipation crisis: 1987 - The "Fed Model"
- A first example of an anticipation crisis: 1987 - The crash
- A second example of an anticipation crisis - 20001
- Key drivers of tactical asset allocation - Goals
- Key drivers of tactical asset allocation - Implementation
3. First Reporting and Rebalancing
- Overview of the milestone
- Risk management applied to portfolio allocation
- Defining the Value-at-Risk
- Computing the Value-at-Risk
- Defining the Expected Shortfall
- Computing the Expected Shortfall
- Risk as volatility?
4. Final Reporting
- Overview of the milestone
- The Sharpe, Treynor and Sortino ratios - Sharpe
- The Sharpe, Treynor and Sortino ratios - Treynor and Sortino
- Beating the benchmark or the peer group? - Peer group analysis
- Beating the benchmark or the peer group? - Screening criteria
- A few concluding words
