Question

4. Tania is a fashion designer her late 30s that plans to retire within 20 years. She enjoys a very "in" lifestyle and likes to hang out with the "in-crowd" in the "in" nightspots whenever she has time off her busy schedule. Her tastes are very contemporary and she always likes to live in the most popular neighborhood in her city, KL.. In the last four years, she has moved five times. In her personal and professional life, Ally is always worried about being part of the young, fashionable and popular elite and will go any length to fit in. Although highly intelligent, she does not know much about investing and has come to you as a client, because you were recommended by one of her clients from Hollywood. She wants you to set up an investment portfolio for her that mimics those of Malaysian stars. a. How would you characterize Tania as an investor? (5Marks) b. Present an argument in which you are trying to convince Tania to try a contrarian investment strategy. (15Marks)

Answer 1

Answer

a.

Tania as a fashion expert in Hollywood based on the taste and preferences of her it is quite likely that the investment strategy of her must be more specific. Based on the characteristics of Tania on the presented information it can be interpreted that Tania will face trouble at the time of making investment decisions. Tania lacks the impeccable choice in terms of price and products. At the time of making investments it is significant to leverage both the preferences and price on the same page.

b.

As a fashion expert, it is likely that Tania will go for the costume and design without taking investment into consideration. But at the same time she knows that considering everything within the budget or portfolio is significant to take the whole process under consideration. It will be better if Tania adopts the contrarian investment strategy which states making investment at a particular period of time and going with the market trend accordingly. The strategy which will work here for Tania is that analyzing the current market trend along with that taking the significant advantage of it at the same time.