+1-817-968-5551
+61-488-839-671
+44-7480-542904About Expert
Key Topics
Requirement
Question: Write Investment Strategy Design for Mr. Z a HNW Individual
Solution
Introduction:
Investment is the most appropriate way of increasing ones assets. The money which one has grows only when it is converted into some good and growing asset and as the value of the asset increases, so does the value of the money. Real estate is one sector which is regarded as one of the safe mode of investments and it is considered to give a healthy returns. The reason why many people cannot invest in real estate is that it need some good amount of investments in the beginning itself. Investing such huge amount may not be feasible for masses and hence High Income Group people treats it as a safe and ever-increasing harbor (Tomchom, 2014). In an economy like Singapore where land is not available in abundance, if one can invest in some healthy real estate there, then the returns are destined to be healthy and promising. With this pretext, the following report is for the client Mr. Z, who is to invest 5 Million SGD.
Are you unable to complete your coursework on your own? Take management assignment help from Allassignmenthelp.com writers to get the highest grade. We have talented assignment experts who can help you in crafting a high-quality assignment. In all these years we have appeared as the best assignment writing help service on the internet.
Things to be considered before investing:
The basic pretext of investment states that the “Risk – beta” must be low and the returns are assured to be keeping very less deviations. The following are the major points considered for Mr. Z (Bardy, 2016):
-
- Should consider this investment as a thorough source of income. That income must be recurring and should be able to produce some good for the client.
-
- It should beat inflation. Statistically, the property prices rises at the same rate as that of inflation, so investment must be in some thorough asset that is able to beat the inflation. In this case the inflation is 3%, hence increase of almost 4 to 5% is something expected.
-
- If the property is not a local one and one cannot take care of it personally, then it should be avoided as an investment option. Since Mr. Z is not a resident of Singapore, hence tangible real estate investment is not something that should be recommended.
-
- The net yield is the critical insight that must be forecasted properly for the real estate asset. This is an important mode of analysis, as it is the most specific mode of calculating the returns that the real estate can yield.
Based on these analysis it is proposed that Mr. Z should not invest in the tangible real estate and should think of some peripheral options. There need to be some option that is able to meet the above demands and also able to produce the best yield for the client. It should also be noted here is that all the figures related to real estate is based on anticipation and forecasts and hence the analysis has to be pretty through and intruding. The figures given in the case are good indicator of making a choice for the best investment option.
Why Property Stocks and REITs are better options then Real Property Investments:
Considering the above analysis, the best option for investment for Mr. Z is that he should invest some amount in Property Stock and some in REITs. The main reason for giving two options is to increase the portfolio and diversification and hence the “Risk – beta” is reduced (Hayes, 2014). This ensures that from one part the returns will keep on flowing in. Looking at the 52 week bracket of price fluctuations it is seen that consistency is seen with the Property stocks and also the minimum and maximum value of the stocks has been keeping a very less deviation level. This deviation is nothing but the sigma - value and hence the deviation and further the risk. The choice is to be made between the REITs and actual property, for which the REIT is a better option, since Mr. Z is not a resident of Singapore and hence he will not be here to take care of the property by himself, which goes on to clarify that REIT is the better option among the two options that are available. Able Ltd. is the option to be considered for Property stocks as their transaction price has been pretty higher than any other. Also, the option for REITs should be D – REITs, as the 6 month’s average traded volume is substantially high for this option and hence overall it is concluded that these are the best options available for the investment. Since the constraint is restricted to these options only and hence the overall assessment claims for these options and confidence is such that the returns must be good from them.
Proportion of Investments between Property Stocks and REITs:
The investment must be 70:30, there is no hard mathematics in this, it is just that property stocks tend to give better returns and are less risky than the other options. Hence this division is what is recommended.
Place Order For A Top Grade Assignment Now
We have some amazing discount offers running for the students
Place Your OrderReferences:
-
Bardy, J. (2016). Strategy Primer: investing in real estate. London: OakTree.
-
Hayes, M. (2014). Real Estate Investing 101. New York: Straight Talk Publications.
-
Tomchom, S. (2014). How To Correctly Value And Analyze Investment Property. Changi: Financial Samurai.
Give your grades a boost
Just share your requirements and get customized solutions on time.
-
1,168,768 Orders
-
4.9/5 Overall Rating
-
5,052 Experts
