Investment Analysis

Read Complete Research Material


Investment Analysis




Investment objective and constraints of Mr. David1


Option 1: “Buy to Let”2

Option 2 - “UK Gilt”5

Option 3: Shares of Burberry7




Case Study: Mr. David Priddin


Individual invest money so that they can secure their future. Investment analysis is important since it channelized funds into effective investment that will offer profit. This investment differs according to individual constraints and analyzing each stated investment highlights risk and losses that might take place in future. In this paper, the focus would be on advising Mr. David Priddin concerning investment option i.e. which option is profitable and which is not.


Overview of Mr. David Priddin

Mr. David Priddin is single and an active sales representative. He is currently 29 years old having lean life. He has now decided to get settle and start building wealth for the long term.

Investment objective and constraints of Mr. David

The following are the investment constraints for Mr. David

Risk and Return: As David is 29 years of age and he is young and active, t eh most suitable investment objective would be Capital Appreciation. In Capital Appreciation the main is to grow as compared to preserve. For accomplishing this, the objective of the return must be equal to return that is greater than expected inflation. With this objective, David intention would be of growing their investment i.e. growing their current capital. Risk tolerance of Mr. David would be high since he is young and also has a capacity to tolerate greater risk. Furthermore, as his demand for higher return and on higher return investment greater risk is connected (p. 41).

Looking at the investment statement i.e. is higher risk and higher return, the following are constraints are essential to formulate.

Liquidity Constraints: Mr. David does not need high liquidity as he is single and does not have immediate liquidly or cash requirements.

Time Horizon: Mr. David investment timeline is for longer duration. He has greater capacity to accept risk as longer duration offer longer time to recoup any losses experienced (p.43).

Tax Concerns: As far as taxation is concern, Mr. David would be not under high tax b racket since he is a sales representative and would not be having huge amount of investment. The main focus would be on investment that does not lie for taxation. Hence, he would look for maximizing After-tax return (p.42).

Legal and Regulatory: For Mr. David there would be not legal and regulatory requirement i.e. laws, accountancy rules etc.

Unique needs and preferences: Considering Mr. David investment objective, unique preferences would be investing in secure and reputable company. Certain amount will be left aside for trust and charity (Reilly, Brown, 2012, pp.41-43).

Investment options for Mr. David

Option 1: “Buy to Let”

Buy to Let is a phrase that refers to investment in property in UK. This investment is just for profit purpose i.e., landlords use to purchase properties in UK and these were used to be let for profit ...
Related Ads