Investment Recommendations for Mr. Pang with SGD 1.8 Million Fund

Overview of Investment Tools and Concepts

Based on your understanding of the investment tools and concepts that you have learned about thus far, examine and illustrate how you can use the same tools and concepts to advise Mr. Pang on allocating and utilising his investible funds of SGD 1.8 million.

Describe and discuss your recommendation(s) (in 800 – 1,000 words) by analysing with whom and how Mr. Pang should or should not invest the cash he has on hand given his situation. Compare the relative merits, demerits and risks involved and appraise the potential outcomes if Mr. Pang were to take up all your recommendations. You can also synthesise and give additional suggestion(s) and/or alternative(s) where appropriate (after giving due consideration to the various assumptions and constraints outlined above and below) all of which must be duly supported by sound and detailed arguments.

1. In presenting your recommendation(s) to Mr. Pang, state the relevant steps involved in arriving at such a conclusion(s). This should include providing details of your analysis in determining Mr. Pang’s various needs, requirements and objectives and how your recommendation(s) meet these criteria.

2. Demonstrate your understanding of the investment concepts and tools that you have learnt (refer to your course Study Guide) in preparing your recommendation(s) with sound reasons and explanations. Consider the following in your write-up:

a. Have you conducted a thorough evaluation of Mr. Pang’s investment circumstances and requirements regarding his investment profile, stage of life cycle investing, liquidity needs, risk tolerance, etc. before deciding what his investment objectives should be? (Please note that mere listing or repeating of Mr. Pang’s circumstances as provided in the case is NOT the same as profiling. Profiling requires you to analyse and come to conclusions that fit his requirements regarding products, risk tolerance, time horizon for investing, investment objectives, liquidity needs, etc.)

b. Have you carried out a proper analysis of the proposals and considered the various risk factors or possible alterations in terms of asset allocation and diversification to meet Mr. Pang’s needs as previously analysed by you under 2. a. above? Have you considered the business environment, legal and regulatory framework in your investment decision making process?

c. Have you prepared your recommendations based on your understanding and analysis and showed Mr. Pang the potential results or consequences of your suggestion(s)?

d. What potential issues or problems would Mr. Pang face if he were to accept your recommendations? Are there any other mitigating factors or actions that Mr. Pang can consider or take to reduce the uncertainties or risks if he were to fully accept your recommendations?