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EARLY METHODS SECTION 1
Early Methods Section
Tony Williams
Argosy University
Yvonne Bustamante
20 May 2015
1. What is your research question?
Do the indirect or direct exposures have influence for
misinformation effecting testimony and eyewitness memory?
2. What is your hypothesis or hypotheses? What is the null
hypothesis?
Hypothesis: Exposure towards misinformation leads to human
memory distortions for events that are genuinely experienced
and also individual details, places, and things and observer’s
are misinformed thus portraying untrue information.
Null Hypothesis: The human memory is unaffected on events
that are experienced, also individual details, places, and things
and observer’s are not misinformed which does not portray
untrue information.
3. How many participants would you like to use and why? What
are the inclusion characteristics, i.e., what must they have in
order to be included in your study (for example, gender,
diagnosis, age, personality traits, etc.)? Are there any exclusion
characteristics, i.e. are there certain characteristics that would
exclude them from being in your study? Does the sample need
to be diverse? Why or why not?
For such study 120 contestants, 60 female and 60 male members
are used. The group comprises of persons between 18-55 years
age. I have chosen 120 contestants representing equal gender
split. They are split in 3 age groups, like 18-30, 31-44, and 45-
55. This places 40 individuals in every group. The ethnicity and
race are divided evenly between the groups. Excluding one
criteria that individuals below 18 and over 55 years cannot
participate. I rely as the sample is not diversified for
generalizing my findings to the adults. Study cannot be
completed by females only and the results are expected for
males too.
4. What sampling technique will be used to collect your sample?
What population does your sample generalize to?
Sampling technique used to collect the sample is convenience
sampling. This is due to cost effectiveness and ease. It also
provides the ability for choosing number of participants
required. Individuals are invited to participate in the study till
the amount desired and diversity is fulfilled.
Though convenience sampling is not greatly reviewed for
generalizing the population, but if properly conducted between
the parameters suggested above, the study must be generalized
to the population of adults. There is no specific exclusion or
inclusion criteria can control the generalization of a particular
group. I have planned for splitting the gender for getting the
equal percentage of ethnicities/race involved in the study and
uniformly representing it in every age group. This helps towards
better generalization of general population study.
5. What are the variables in your study? HINT: Refer back to
your hypothesis or hypotheses.
The variables in the study include gender, race, age and
ethnicity. The environment must be variable and the person
must present the information. The information given by itself is
considered a variable for few misinformation received and some
not. The method that presents information is a variable too as
few may be receiving misinformation through a person’s
discussion read in a paragraph style. The event observed is a
variable. The participant’s survey taken is also a variable.
6. Provide operational definitions for each variable.
Gender: Relates to sex of a person.
Age: The consideration of the number of passing years since
birth determined by deducting the birth year and the current
year. Subtract 1 for reaching month and day.
Race: A communal concept for classifying humans by cultural,
anatomical, ethnic, geographical, genetic, historical, religious,
linguistic and communal affiliation.
Ethnicity: classifying person’s as African American, European
American, Pacific Islander/ Asian American, Native American,
Latino or Other.
Information: details or Facts of a subject; understanding for
obtaining someone or something.
Misinformation: Information which is intentionally untrue and
inaccurate which is deliberately spread.
Discussion: conversation among a person(s) on a topic(s) for
reaching a decision or for exchanging information and ideas.
Event: An incident, something which happens, or is considered
as happening in a specific place in a specific time interval.
Survey: “Method of collection of information or facts as stated
by people. This type of collection of data is called self-report
data that implies that the people have completed the survey
themselves” (Alleydog.com, 2014).
7. How will you measure each variable? Discuss the reliability
and validity of these measures in general terms.
Gender: measuring is nominal be it female or male. The
measure is trustworthy for measuring a person’s gender as
female or male. It is valid logically for measuring the measure
intended.
Age: is calculated on time scale. The measure is trustworthy for
measurement is either within age group or not. It has validity
for providing a measurement of person’s age.
Race: measured in categories of Indian American or Alaska
Native, African or Black American, Asian Hawaiian Native or
Pacific Islander, or White. This is trustworthy as the individual
gives same answers to the question and is valid for measuring
the measure intended.
Ethnicity: measured in categories of Latino or Hispanic or Not
Hispanic or Latino. This is trustworthy as the individual gives
same answers to the question and is valid for measuring the
measure intended.
Misinformation: measured in a nominal point with received and
non received categories. This is trustworthy as it known
whether the contestants received or have not received
misinformation. It is valid as it is answerable to the question on
participant’s getting misinformation or not.
8. What technique will be used for data collection (e.g.,
observation, survey, interview, archival, etc.)?
The technique used for data collection is watching video clip
and preparing with pencil and paper for survey questionnaire
having numerous steps.
9. What type of research design is being used?
Research design is being used is correlational research. This
research type helps in relationships among two or even more
than two variables like misinformation receiving and its affect
on the memory of eyewitness and testimony. We will utilize a
quantitative technique. We are utilizing a research survey
design involving questionnaire for gathering information from
the contestants.
10. Briefly discuss the procedure that would be followed when
conducting the research.
The contestants will be watching a video of two minute on
crime. Then they will cover the survey having multiple stages.
The first stage includes word search, crossword puzzles, Sudoku
and mazes where 8 minutes work time is given. The next part
includes narrative. One narrative version depicts the video clip
events with true data’s and details and a variant version
containing misleading data in five parts of untrue information.
They have only 3 minutes for reading the narrative. After they
have read the narrative, contestants will be handing over and
completing a questionnaire on the event witnessed containing 20
questions, five of which address the misleading data on the
surveys with misleading information. Participants in discussion
team are instructed for discussing the questions collaboratively
with their partners and can select a single response to the asked
questions. They have 10 minutes for completing the survey.
This is followed by four demographic questions on gender, race,
age and ethnicity with 5 minutes for completion. After 5
minutes another question is given including a free recalling
prompt, following 20 more recalling questions for both group’s
individuals. 10 minutes is given for completing this
questionnaire and are instructed for continuing with filler
activities when time is left.
11. What are some potential ethical issues? How might they be
addressed?
Some potential ethical issues are-:
· Careful access to research interpretation, data collection and
survey.
· Acknowledgment of the surveys repeatedly with utilization of
the information.
· Aiming for advancement in the research and knowledge.
References:
· Alleydog.com. (2014, January 1). Survey. Retrieved November
19, 2014, from
http://www.alleydog.com/glossary/definition.php?term=Survey
· Argosy University Online. (2014, January 1). Research
Methods Module 1- Module 3. Retrieved November 19, 2014,
from
http://myeclassonline.com/re/DotNextLaunch.asp?courseid=106
86823&userid=22842622&sessionid=cd4d8605a8&tabid=gs7W9
eYaOK //4xGN6qdrZ86vKRPLAncccqnKo9fR/7rz7deMbJF5F
v39z5aoEL&sessionFirstAuthStore=true&macid=tBumIee7T6ii8
Ydl1uinSpoFk5toNhAsRXyEm3P27ex4PI8u/
· Carroll, S. (n.d.). Types of research designs you can use for
your dissertation. Retrieved November 19, 2014, from
http://www.dissertation-statistics.com/research-designs.html
· Cohen, E. (2009, September 19). Measurement. Retrieved
November 19, 2014, from
http://www.sjsu.edu/people/edward.cohen/courses/298/s6/Week
4 handout Measurement.pdf
· Convenience sampling | Lærd Dissertation. (2012, January 1).
Retrieved November 19, 2014, from
http://dissertation.laerd.com/convenience-sampling.php
· Santayana, G. (2011, July 17). Measurement in Research.
Retrieved November 19, 2014, from
http://www.drtomoconnor.com/3760/3760lect03a.htm
· Shaughnessy, J., Zechmeister, E., & Zechmeister, J. (2008).
Research Methods In Psychology, 8th Edition. [VitalSource
Bookshelf version]. Retrieved from
http://digitalbookshelf.argosy.edu/books/007-7376463/id/P5-42
· Types of Variables. (n.d.). Retrieved November 19, 2014,
from
http://www.indiana.edu/~educy520/sec5982/week_2/variable_ty
pes.pdf
STRATEGY ANALYSISForm 01_05 Strategy
Analysis<1><2>POLICYOWNERSTYLETOTALDESCRIPTION
CURRENTPOLICYPROPOSEDTOTALSAMPLECURRENT
MMA RESERVES$0$0NEW MMA
RESERVES$0$0$0RESERVETOTAL
RESERVES$0$0$0CASH/MMASAMPLE100.0%SCHWAB
MONEY
MKTSWMXX1,000,000100.0%$20,0002.0%$20,0002.0%2.0%(
$980,000)$0$0$0US FIXED INCOMESAMPLESHORT
GOVT/CORP0.0%DFA 1 YEAR
FIXEDDFIHX$70,0007.0%$70,0007.0%7.0%$70,000$0$0$0SA
MPLESHORT/INT GOVT/CORP0.0%PIMCO-LOW
DURATION
FUNDPTLDX$40,0004.0%$40,0004.0%4.0%$40,000$0$0$0INT
GOVT/CORP0.0%BLACKROCK CORE
BONDBFMCX0.0%0.0%$0$0$0$0SHORT
MUNICIPAL0.0%VANG MUNI
SHORTVWSTX0.0%0.0%$0$0$0$0SAMPLESHORT/INT
MUNICIPAL0.0%THORNBURG LTD TERM
MUNILTMIX$80,0008.0%$80,0008.0%8.0%$80,000$0$0$0SA
MPLEINTER MUNICIPAL0.0%MORGAN GRENFELL MUNI
BONDMGMBX$180,00018.0%$180,00018.0%18.0%$180,000$0
$0$0$0$0$0$0FIXED
INCOME$1,000,000100.0%$390,00039.0%$390,00039.0%39.0
%$0$0$0$0LARGE CAP - U.S.SAMPLECORE0.0%BT
EQUITY 500
INDEXBTIIX$60,0006.0%$60,0006.0%6.0%$60,000$0$0$0SA
MPLEVALUE0.0%DFA LARGE CAP
VALUEDFLVX$100,00010.0%$100,00010.0%10.0%$100,000$
0$0$0SAMPLEGROWTH0.0%WILSHIRE LARGE CO
GROWTHWLCGX$50,0005.0%$50,0005.0%5.0%$50,000$0$0$
0SMALL CAP - U.S.SAMPLESMALL CAP VALUE0.0%DFA
US 6-10
VALUEDFSVX$60,0006.0%$60,0006.0%6.0%$60,000$0$0$0S
AMPLESMALL CAP GROWTH0.0%BLACKROCK SMALL
CAP
GRTHPSGIX$40,0004.0%$40,0004.0%4.0%$40,000$0$0$0INT'
L EQUITYSAMPLEDEVELOPED0.0%SEI
INTERNATIONALSEITX$140,00014.0%$140,00014.0%14.0%$
140,000$0$0$0SAMPLEEMERGING
MARKETS0.0%MONTGOMERY EMERG
MKT*MNEMX$50,0005.0%$50,0005.0%5.0%$50,000$0$0$0R
EAL ESTATESAMPLEREITS0.0%DFA REAL
ESTATEDFREX$30,0003.0%$30,0003.0%3.0%$30,000$0$0$0
ALTERNATIVESAMPLECOMMODITY
INDEX0.0%OPPENHEIMER REAL
ASSETQRAAX$30,0003.0%$30,0003.0%3.0%$30,000$0SAMP
LEMARKET NEUTRAL0.0%BARR MARKET
NEUTRALBMNIX$50,0005.0%$50,0005.0%5.0%$50,000$0EQ
UITY$00.0%$610,00061.0%$610,00061.0%61.0%* ONE
SOURCE
FUNDSTOTAL$1,000,000100.0%$1,000,000100.0%$1,000,000
100.0%100.0%$0$0SOURCE: “Tools and Templates for Your
Practice for Financial Advisers, Planners, and Wealth
Managers”, Katz, Deena (2001, Bloomberg Press)
Investment Philosophy
This statement provides the ideology with which all investments
at UMUC Portfolio Management are made. It is the ideology
that has made us a market leader in portfolio management,
realizing high returns for our clients. As a wealth management
professional at UMUC, I have internalized and profess this
philosophy in order to construct the best investment strategy for
you. The mark of true excellence in portfolio management is
more than just high returns on investments, it is investor
satisfaction. Our investments must entirely fit the investor’s
needs.
Client RelatedGoals
We believe in setting goals for the investments we make for our
clients. We walk our clients through realizing what they require
from their investment in the way of risk and return. We like to
understand what our client’s risk palate is so that we can make
investments they can be comfortable with. The client is also
made to understand what level of returns they expect from their
investment and whether it is feasible.Constraints
The proven economic theory of limited resources urges us to
consider what limitations the client might have in funding their
investment. The firm will need to know how big a pot it is
working out of and what time horizons to work within. The
client’s capital amount will be of utmost importance in
determining the size of their portfolio. Time horizons as with
how soon the investment can be liquidated will determine
whether to invest in long-term or short-term financial
instruments.
Company related issuesInvestment discipline
UMUC Portfolio Management believes in the power of good
research. Every investment made is supported by empirical
market data, reached through thorough scrutiny of the market
movements. This ensures we make well-informed investment
decisions all the time. Investment Strategy
Client needs
The client is ready to invest $100,000 for a five week period.
The client appears to be risk neutral, wishing to invest in high
risk investments but also mitigating the risk exposure by
diversifying the portfolio. The client specified that the portfolio
should have five investments to that end.
Financial Instruments
Given the five week time horizon, the company the firm should
focus on acquiring short term securities that satisfy the client’s
risk palate. I recommend investing in the derivatives market and
non-government fixed interest borrowing. The derivatives
market holds the most promise for riskiness and diversity. I
identify bond futures, interest rate futures, currency futures and
commodity options, especially gold and oil, as lucrative
investment opportunities in the bond market.
The bond market will be affected by individual companies’
performance, interest rates by national economy movements,
and currency rates by export and import trends in the country.
Gold and oil futures always seem to be positively correlated in
their price movements. All this makes for a highly diversified
portfolio. The fact that each security is tied to a different
industry reduces the systematic risk considerably. As for fixed
interest investments, I am inclined towards the security of
certificates of deposit (CDs). The rate of return on CDs is
higher than for other non-government fixed interest borrowing
financial instruments. They also fit the time horizon within
which the client requires us to work.
I suggest we build an investment portfolio consisting of these
five instruments since they are best tailored for the client’s goal
of high return. The high return is feasible in the five week time
horizon presented by the client, and the risk involved is
mitigated by the diversity of the financial instruments and the
industry within which they are marketed.
Asset allocation
The study by Brinson et al awoke the investment world to the
importance of asset allocation to rate of return for a portfolio.
The choice of how much of what investment to purchase lies
ultimately with UMUC. Careful consideration should be given
to the weight of each investment in the portfolio. This will call
for several iterations in calculating the risk of the portfolio and
the expected return with different combinations of the weights
of the component investments. This should help identify the
efficient frontier from which we can decide which combination
of investments will lead to realizing maximum return with
minimum risk.
References:
1. Gallton, T. (2012, Aug 14). Commentary: Money
management: How to create an investment policy
statement. Daily Record Retrieved from
http://search.proquest.com/docview/1034443954?accountid=134
574
2. Damodaran, A. (2010). Applied corporate finance. John
Wiley & Sons.
3. Brinson, G. P., Hood, L. R., & Beebower, G. L. (1995).
Determinants of portfolio performance. Financial Analysts
Journal, 51(1), 133-138.
4. Armstrong, F., (1995). Investment strategies of the 21st
century.

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EARLY METHODS SECTION1Early Methods Section.docx

  • 1. EARLY METHODS SECTION 1 Early Methods Section Tony Williams Argosy University Yvonne Bustamante 20 May 2015 1. What is your research question? Do the indirect or direct exposures have influence for misinformation effecting testimony and eyewitness memory? 2. What is your hypothesis or hypotheses? What is the null hypothesis? Hypothesis: Exposure towards misinformation leads to human memory distortions for events that are genuinely experienced and also individual details, places, and things and observer’s are misinformed thus portraying untrue information. Null Hypothesis: The human memory is unaffected on events that are experienced, also individual details, places, and things and observer’s are not misinformed which does not portray untrue information. 3. How many participants would you like to use and why? What are the inclusion characteristics, i.e., what must they have in order to be included in your study (for example, gender, diagnosis, age, personality traits, etc.)? Are there any exclusion characteristics, i.e. are there certain characteristics that would
  • 2. exclude them from being in your study? Does the sample need to be diverse? Why or why not? For such study 120 contestants, 60 female and 60 male members are used. The group comprises of persons between 18-55 years age. I have chosen 120 contestants representing equal gender split. They are split in 3 age groups, like 18-30, 31-44, and 45- 55. This places 40 individuals in every group. The ethnicity and race are divided evenly between the groups. Excluding one criteria that individuals below 18 and over 55 years cannot participate. I rely as the sample is not diversified for generalizing my findings to the adults. Study cannot be completed by females only and the results are expected for males too. 4. What sampling technique will be used to collect your sample? What population does your sample generalize to? Sampling technique used to collect the sample is convenience sampling. This is due to cost effectiveness and ease. It also provides the ability for choosing number of participants required. Individuals are invited to participate in the study till the amount desired and diversity is fulfilled. Though convenience sampling is not greatly reviewed for generalizing the population, but if properly conducted between the parameters suggested above, the study must be generalized to the population of adults. There is no specific exclusion or inclusion criteria can control the generalization of a particular group. I have planned for splitting the gender for getting the equal percentage of ethnicities/race involved in the study and uniformly representing it in every age group. This helps towards better generalization of general population study. 5. What are the variables in your study? HINT: Refer back to your hypothesis or hypotheses. The variables in the study include gender, race, age and ethnicity. The environment must be variable and the person must present the information. The information given by itself is considered a variable for few misinformation received and some not. The method that presents information is a variable too as
  • 3. few may be receiving misinformation through a person’s discussion read in a paragraph style. The event observed is a variable. The participant’s survey taken is also a variable. 6. Provide operational definitions for each variable. Gender: Relates to sex of a person. Age: The consideration of the number of passing years since birth determined by deducting the birth year and the current year. Subtract 1 for reaching month and day. Race: A communal concept for classifying humans by cultural, anatomical, ethnic, geographical, genetic, historical, religious, linguistic and communal affiliation. Ethnicity: classifying person’s as African American, European American, Pacific Islander/ Asian American, Native American, Latino or Other. Information: details or Facts of a subject; understanding for obtaining someone or something. Misinformation: Information which is intentionally untrue and inaccurate which is deliberately spread. Discussion: conversation among a person(s) on a topic(s) for reaching a decision or for exchanging information and ideas. Event: An incident, something which happens, or is considered as happening in a specific place in a specific time interval. Survey: “Method of collection of information or facts as stated by people. This type of collection of data is called self-report data that implies that the people have completed the survey themselves” (Alleydog.com, 2014). 7. How will you measure each variable? Discuss the reliability and validity of these measures in general terms. Gender: measuring is nominal be it female or male. The measure is trustworthy for measuring a person’s gender as female or male. It is valid logically for measuring the measure intended. Age: is calculated on time scale. The measure is trustworthy for measurement is either within age group or not. It has validity for providing a measurement of person’s age. Race: measured in categories of Indian American or Alaska
  • 4. Native, African or Black American, Asian Hawaiian Native or Pacific Islander, or White. This is trustworthy as the individual gives same answers to the question and is valid for measuring the measure intended. Ethnicity: measured in categories of Latino or Hispanic or Not Hispanic or Latino. This is trustworthy as the individual gives same answers to the question and is valid for measuring the measure intended. Misinformation: measured in a nominal point with received and non received categories. This is trustworthy as it known whether the contestants received or have not received misinformation. It is valid as it is answerable to the question on participant’s getting misinformation or not. 8. What technique will be used for data collection (e.g., observation, survey, interview, archival, etc.)? The technique used for data collection is watching video clip and preparing with pencil and paper for survey questionnaire having numerous steps. 9. What type of research design is being used? Research design is being used is correlational research. This research type helps in relationships among two or even more than two variables like misinformation receiving and its affect on the memory of eyewitness and testimony. We will utilize a quantitative technique. We are utilizing a research survey design involving questionnaire for gathering information from the contestants. 10. Briefly discuss the procedure that would be followed when conducting the research. The contestants will be watching a video of two minute on crime. Then they will cover the survey having multiple stages. The first stage includes word search, crossword puzzles, Sudoku and mazes where 8 minutes work time is given. The next part includes narrative. One narrative version depicts the video clip events with true data’s and details and a variant version containing misleading data in five parts of untrue information. They have only 3 minutes for reading the narrative. After they
  • 5. have read the narrative, contestants will be handing over and completing a questionnaire on the event witnessed containing 20 questions, five of which address the misleading data on the surveys with misleading information. Participants in discussion team are instructed for discussing the questions collaboratively with their partners and can select a single response to the asked questions. They have 10 minutes for completing the survey. This is followed by four demographic questions on gender, race, age and ethnicity with 5 minutes for completion. After 5 minutes another question is given including a free recalling prompt, following 20 more recalling questions for both group’s individuals. 10 minutes is given for completing this questionnaire and are instructed for continuing with filler activities when time is left. 11. What are some potential ethical issues? How might they be addressed? Some potential ethical issues are-: · Careful access to research interpretation, data collection and survey. · Acknowledgment of the surveys repeatedly with utilization of the information. · Aiming for advancement in the research and knowledge.
  • 6. References: · Alleydog.com. (2014, January 1). Survey. Retrieved November 19, 2014, from http://www.alleydog.com/glossary/definition.php?term=Survey · Argosy University Online. (2014, January 1). Research Methods Module 1- Module 3. Retrieved November 19, 2014, from http://myeclassonline.com/re/DotNextLaunch.asp?courseid=106 86823&userid=22842622&sessionid=cd4d8605a8&tabid=gs7W9 eYaOK //4xGN6qdrZ86vKRPLAncccqnKo9fR/7rz7deMbJF5F v39z5aoEL&sessionFirstAuthStore=true&macid=tBumIee7T6ii8 Ydl1uinSpoFk5toNhAsRXyEm3P27ex4PI8u/ · Carroll, S. (n.d.). Types of research designs you can use for your dissertation. Retrieved November 19, 2014, from http://www.dissertation-statistics.com/research-designs.html · Cohen, E. (2009, September 19). Measurement. Retrieved November 19, 2014, from http://www.sjsu.edu/people/edward.cohen/courses/298/s6/Week 4 handout Measurement.pdf · Convenience sampling | Lærd Dissertation. (2012, January 1). Retrieved November 19, 2014, from http://dissertation.laerd.com/convenience-sampling.php · Santayana, G. (2011, July 17). Measurement in Research. Retrieved November 19, 2014, from http://www.drtomoconnor.com/3760/3760lect03a.htm · Shaughnessy, J., Zechmeister, E., & Zechmeister, J. (2008). Research Methods In Psychology, 8th Edition. [VitalSource Bookshelf version]. Retrieved from http://digitalbookshelf.argosy.edu/books/007-7376463/id/P5-42 · Types of Variables. (n.d.). Retrieved November 19, 2014,
  • 7. from http://www.indiana.edu/~educy520/sec5982/week_2/variable_ty pes.pdf STRATEGY ANALYSISForm 01_05 Strategy Analysis<1><2>POLICYOWNERSTYLETOTALDESCRIPTION CURRENTPOLICYPROPOSEDTOTALSAMPLECURRENT MMA RESERVES$0$0NEW MMA RESERVES$0$0$0RESERVETOTAL RESERVES$0$0$0CASH/MMASAMPLE100.0%SCHWAB MONEY MKTSWMXX1,000,000100.0%$20,0002.0%$20,0002.0%2.0%( $980,000)$0$0$0US FIXED INCOMESAMPLESHORT GOVT/CORP0.0%DFA 1 YEAR FIXEDDFIHX$70,0007.0%$70,0007.0%7.0%$70,000$0$0$0SA MPLESHORT/INT GOVT/CORP0.0%PIMCO-LOW DURATION FUNDPTLDX$40,0004.0%$40,0004.0%4.0%$40,000$0$0$0INT GOVT/CORP0.0%BLACKROCK CORE BONDBFMCX0.0%0.0%$0$0$0$0SHORT MUNICIPAL0.0%VANG MUNI SHORTVWSTX0.0%0.0%$0$0$0$0SAMPLESHORT/INT MUNICIPAL0.0%THORNBURG LTD TERM MUNILTMIX$80,0008.0%$80,0008.0%8.0%$80,000$0$0$0SA MPLEINTER MUNICIPAL0.0%MORGAN GRENFELL MUNI BONDMGMBX$180,00018.0%$180,00018.0%18.0%$180,000$0 $0$0$0$0$0$0FIXED INCOME$1,000,000100.0%$390,00039.0%$390,00039.0%39.0 %$0$0$0$0LARGE CAP - U.S.SAMPLECORE0.0%BT EQUITY 500 INDEXBTIIX$60,0006.0%$60,0006.0%6.0%$60,000$0$0$0SA MPLEVALUE0.0%DFA LARGE CAP
  • 8. VALUEDFLVX$100,00010.0%$100,00010.0%10.0%$100,000$ 0$0$0SAMPLEGROWTH0.0%WILSHIRE LARGE CO GROWTHWLCGX$50,0005.0%$50,0005.0%5.0%$50,000$0$0$ 0SMALL CAP - U.S.SAMPLESMALL CAP VALUE0.0%DFA US 6-10 VALUEDFSVX$60,0006.0%$60,0006.0%6.0%$60,000$0$0$0S AMPLESMALL CAP GROWTH0.0%BLACKROCK SMALL CAP GRTHPSGIX$40,0004.0%$40,0004.0%4.0%$40,000$0$0$0INT' L EQUITYSAMPLEDEVELOPED0.0%SEI INTERNATIONALSEITX$140,00014.0%$140,00014.0%14.0%$ 140,000$0$0$0SAMPLEEMERGING MARKETS0.0%MONTGOMERY EMERG MKT*MNEMX$50,0005.0%$50,0005.0%5.0%$50,000$0$0$0R EAL ESTATESAMPLEREITS0.0%DFA REAL ESTATEDFREX$30,0003.0%$30,0003.0%3.0%$30,000$0$0$0 ALTERNATIVESAMPLECOMMODITY INDEX0.0%OPPENHEIMER REAL ASSETQRAAX$30,0003.0%$30,0003.0%3.0%$30,000$0SAMP LEMARKET NEUTRAL0.0%BARR MARKET NEUTRALBMNIX$50,0005.0%$50,0005.0%5.0%$50,000$0EQ UITY$00.0%$610,00061.0%$610,00061.0%61.0%* ONE SOURCE FUNDSTOTAL$1,000,000100.0%$1,000,000100.0%$1,000,000 100.0%100.0%$0$0SOURCE: “Tools and Templates for Your Practice for Financial Advisers, Planners, and Wealth Managers”, Katz, Deena (2001, Bloomberg Press) Investment Philosophy This statement provides the ideology with which all investments at UMUC Portfolio Management are made. It is the ideology that has made us a market leader in portfolio management, realizing high returns for our clients. As a wealth management professional at UMUC, I have internalized and profess this
  • 9. philosophy in order to construct the best investment strategy for you. The mark of true excellence in portfolio management is more than just high returns on investments, it is investor satisfaction. Our investments must entirely fit the investor’s needs. Client RelatedGoals We believe in setting goals for the investments we make for our clients. We walk our clients through realizing what they require from their investment in the way of risk and return. We like to understand what our client’s risk palate is so that we can make investments they can be comfortable with. The client is also made to understand what level of returns they expect from their investment and whether it is feasible.Constraints The proven economic theory of limited resources urges us to consider what limitations the client might have in funding their investment. The firm will need to know how big a pot it is working out of and what time horizons to work within. The client’s capital amount will be of utmost importance in determining the size of their portfolio. Time horizons as with how soon the investment can be liquidated will determine whether to invest in long-term or short-term financial instruments. Company related issuesInvestment discipline UMUC Portfolio Management believes in the power of good research. Every investment made is supported by empirical market data, reached through thorough scrutiny of the market movements. This ensures we make well-informed investment decisions all the time. Investment Strategy Client needs The client is ready to invest $100,000 for a five week period. The client appears to be risk neutral, wishing to invest in high risk investments but also mitigating the risk exposure by diversifying the portfolio. The client specified that the portfolio
  • 10. should have five investments to that end. Financial Instruments Given the five week time horizon, the company the firm should focus on acquiring short term securities that satisfy the client’s risk palate. I recommend investing in the derivatives market and non-government fixed interest borrowing. The derivatives market holds the most promise for riskiness and diversity. I identify bond futures, interest rate futures, currency futures and commodity options, especially gold and oil, as lucrative investment opportunities in the bond market. The bond market will be affected by individual companies’ performance, interest rates by national economy movements, and currency rates by export and import trends in the country. Gold and oil futures always seem to be positively correlated in their price movements. All this makes for a highly diversified portfolio. The fact that each security is tied to a different industry reduces the systematic risk considerably. As for fixed interest investments, I am inclined towards the security of certificates of deposit (CDs). The rate of return on CDs is higher than for other non-government fixed interest borrowing financial instruments. They also fit the time horizon within which the client requires us to work. I suggest we build an investment portfolio consisting of these five instruments since they are best tailored for the client’s goal of high return. The high return is feasible in the five week time horizon presented by the client, and the risk involved is mitigated by the diversity of the financial instruments and the industry within which they are marketed. Asset allocation The study by Brinson et al awoke the investment world to the importance of asset allocation to rate of return for a portfolio. The choice of how much of what investment to purchase lies ultimately with UMUC. Careful consideration should be given to the weight of each investment in the portfolio. This will call
  • 11. for several iterations in calculating the risk of the portfolio and the expected return with different combinations of the weights of the component investments. This should help identify the efficient frontier from which we can decide which combination of investments will lead to realizing maximum return with minimum risk. References: 1. Gallton, T. (2012, Aug 14). Commentary: Money management: How to create an investment policy statement. Daily Record Retrieved from http://search.proquest.com/docview/1034443954?accountid=134 574 2. Damodaran, A. (2010). Applied corporate finance. John Wiley & Sons. 3. Brinson, G. P., Hood, L. R., & Beebower, G. L. (1995). Determinants of portfolio performance. Financial Analysts Journal, 51(1), 133-138. 4. Armstrong, F., (1995). Investment strategies of the 21st century.