Investment Strategy and Portfolio Development Business Essay

Investment Strategy and Portfolio Development
Student’s Name
Institutional Affiliation

Dear Client;
This investment report is based on the provided guidelines concerning the desired investment strategies. The following are the components of the report:
A brief summary of the current investment statistics in Australia and the at the International level concerning your requirements
Recommendation of the investment strategy and portfolio based on the brief investment information in the market.
A brief description of how the investment strategy aligns with the investment requirements.
Summary of the Current Investment Condition
Global Market Perspective
The current investment condition in the market is unpredictable and highly risky. The current Coronavirus pandemic has hit a significant blow on the global market. The uncertainty of how long the COVID-19 virus will last has led to the prediction of high contraction of the global economy. This is because the virus has negatively affected industrial production, consumption levels, international trade, and employment. These factors have led to an increase in the level of risk in the investment markets. However, it is also expected that the conditions might improve if governments decide to lift the restrictions on business activities. This will also depend on the US strategies to counter the economic challenges that accrue from the COVID-19 effects. Many countries will follow these strategies since the US is the leading world economy and sets a benchmark for other countries.

Australian Market Perspective
It is forecasted that the Australian economy will experience a massive shrink. This is because the Australian economy highly relies on tourism, agriculture, and exportation of products. These industries have been greatly affected by the COVID-19 crisis, which has led to the halt of operations in these sectors. International travels have been restricted as well as mass gatherings hence preventing both foreign and domestic tourism. The low level of employment and high employee lay-offs due to the virus effects has also led to a high expectation of sluggish economic growth in the short-term. The value of the Australian dollar is even declining at a high rate, thus indicating signs of inflation. However, RBA has put strategies that will cushion the country from inflation by reducing interest rates and purchasing currency. This might be favorable to the investment environment in the short-term.
The following are the market indices for each country
Proposed Investment Strategy
Based on the information above, the company should consider investing extensively in the Australian market rather than the global market. This based on the fact that there is a high risk involved in the investment and assurance of high returns. Considering the significant effect of the Coronavirus on the tourism, agriculture, and export industry in the country, this promises high returns to the investor. Also, consider investing in companies that will significantly benefit from the subsidized interest rates in the country, such as the housing industry. Due to the declining value of the Australian dollar, the company should also put long exposure on businesses that can benefit from this decline, especially the export industry. The Australian economy promises higher returns compared to the international market since it is easier for the country to adjust its economic conditions, with already laid out strategies in progress.
Therefore, we recommend the following structure of initial investment based on the implementation of our investment strategies and philosophy.
S&P/ASX 200 Index universe to be significant in the provision of exposure to index-based large cap-focused Australian companies that indicate high capital growth;
-Companies with a Return On Equity (ROE) ratio of more than 20%
-Companies with a Return on Assets (ROA) ratio of more than 8%
-Companies with 5-year volatility of less than 0.3
-Companies that focus on health care, biotechnology or pharmacy
-Consider taking long positions in all companies that meet the criteria mentioned above.
Nasdaq 100 index universe to provide exposure to healthcare-focused US companies with evidence of high capital growth;
-Companies with a Return On Equity (ROE) ratio of more than 20%
-Companies with a Return on Assets (ROA) ratio of more than 8%
-Companies with 5-year volatility of less than 0.4
-Consider taking long positions in all companies that meet the criteria as mentioned above.
Client’s Preferable LIC and ETP investment options
-Securities that provide exposure to either the International market or the Australian market
-Securities that show evidence of a capital-growth focus on their investment directive
-Consider taking long positions in all compan...