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IP case study

Discussion in 'Financial Planning Study Group' started by johnluo721, 29th Apr, 2010.

  1. johnluo721

    johnluo721 Active Member

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    I not quite sure about part 2 of question. It ask us to make a asset allocation table, do we have to fellow any guideline. or do we just make the table by our own judgement?
     
  2. johnluo721

    johnluo721 Active Member

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    Since nobody reply. I just share some idea of how I complete my assignment. Please correct me if I am wrong or missed some point.
    Firstly i notice the couple overweitght their real estate asset. So I advised fwllowing strategy
    pay off the personal loan which is not tax deductable
    withdraw equity from their investment property, so they have additional cash to invest in margin loan
    invest in managed fund and eatablish margin facility against it.
    I made a assumption of how much they can get from equity and margin loan.
    and I advice following distribution table

    Asset Typ Allocation $ Allocation %
    Cash 100000 8.35%
    fixed interest 300000 25.04%
    Australia Share 300000 25.04%
    Int'l Share 80000 6.68%
    Direct Property 418000 34.89%
    Total Portfolio 1198000 100.00%


    Any contribution would be great appreciated.
    thanks
     
  3. tanya1234

    tanya1234 Member

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    Hi.have marker accepted this asset allocation?

    Hi

    i am about to submit my assignment. just curious to know whether marker has accepted the asset allocation? and was your risk profile medium?

    thanks heaps
     
  4. garycon06

    garycon06 Member

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    Hi folks, is your IP1 assignment on Yanni and Joanna, if so feel free to contact me

    for case study question f, what did you say for part 1 ? part two is obv about the three stocks being in the same sector !
     
  5. kylie13

    kylie13 Member

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    I mentioned that the TD does not have capital growth, get advice on tax implications first and that investing the funds in a TD would not match up with the overall asset allocation strategy that I recommended.
    Hope this helps. I passed by the way :)
     
  6. tachawla

    tachawla New Member

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    Hi, I'm doing the same assignment... And I need help. I've got to resubmit and quite close to my deadline now.
     
  7. garycon06

    garycon06 Member

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    Thanks a million.

    HI Kylie,

    Well done for passing ! 3 more quick questions if you don't mind, I'm really anxious to pass first time around...

    1.
    For the question on 'WOW', what sort of performance drivers etc.. did you mention?

    2.
    When you were recomending products for the asset allocation i.e. fixed interest, Property, Int'l securities etc.

    Did you just provide a fund name i.e. ABC International Securities Fund. or did you go further and talk about current returns, details of the fund etc..

    3.
    Did you recommend that they just pay off home loan and credit cards and invest the remaining $450k. of which i recommended 25% cash, 35% fixed interest 10% property 20%Australian Equities and 10% Int'l Equities (or something along those lines haven't got my assignment at work). My question is, I guess did you recomment the same amount to invest? i.e.$450k or did you add in that they should get a margin loan for tax effectivness.. not sure on this point a colleague at work reckons that this is something that I should consider including as it is mentioned in the background information that they want to be tax effective,,

    Much appreciated, are you finished your DFP now or are you going onto another module?

    thanks a million,
    Gary
     
  8. kylie13

    kylie13 Member

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    Hi again

    I recommended they repay all personal "bad" debt. If you want to suggest margin lending you should justify why. I didn't recommend it. I listed the value drivers and gave an example of these might affect WOW. I am doing SRP now last one. Have you done this?

    I don't think They are after specific proudct names eg amp, axa or colonial. They are after the products themselves. eg fixed interest, shares, balanced growth conservative...............that sort of thing.
     
    Last edited by a moderator: 16th Aug, 2010
  9. garycon06

    garycon06 Member

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    cheers Kylie,

    I've done FFP and am now finalising IP1, not sure which one i'll do next? maybe super? I'll prob wait until the new year to do it..

    Thanks for your advice on the above. can't wait to have it over and done with.

    Rgds,

    gary
     
  10. stav

    stav Member

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    Case Study - Question d Assumptions

    For the case study, what has everyone written for the assumptions made in the plan...

    Very confused
     
  11. loon

    loon New Member

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    Hi All

    kylie13 is it possible for use to chat? besides on this thread I thought It would be easier.

    I need to pass my assignment in one go and would really like some help.
     
  12. stav

    stav Member

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    I should be getting my assignment back in a week, fingers crossed.

    has anyone sat the exam yet?
     
  13. garycon06

    garycon06 Member

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    Hi Stav/ any other ip1 students

    Hi Stav/ any other ip1 students

    I have sat the exam a few months ago, how did you go with your assignment, for question 5 c) what did you recommend they do with WOW shares, buy sell or hold and why? also what did you list as the performance drivers and general and company specific information,, happy to provide you with some exam tip, cheers

    gary
     
  14. TDFawaz

    TDFawaz Tony

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    ?!...confusing...
     
  15. stav

    stav Member

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    I recommended they sell, as they are overvalued, share prices are set to eventually drop. Also mentioned the PE ratio being higher than current industry average of 14.05...also spoke about current earnings, how long it would take to pay it back, may take longer to recoup investment comapred to other shares in this sector with a lower PE ratio. Discussed the fair proce calculation as well.

    For the performance drivers/ company specifics etc these are the points i elaborated on:

    -management ability
    -core competencies
    -option values
    -taking advantage of mkt opportunities (when fuel proces escalated, ppl were looking for a cheaper alternative - started the fuel discounts by shopping at WOW)
    -stability of earnings
    -industry sector prospects
    -interest rates (slighlty effects WOW but not greatly, rising i/r's may mean ppl cut back slightly on shopping bills but they still need basics)

    i dont have my text book on me but there is a section towards the end i think which discusses these
     
  16. garycon06

    garycon06 Member

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    Hi Stav,

    Thanks a million mate, that sounds great.

    when is your exam>?
     
  17. stav

    stav Member

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    No worries.

    Needs to be sat by mid Oct I think, so really, as soon as I can go through all the modules again I'll book it. Sooner the better, want to start Super asap!
     
  18. garycon06

    garycon06 Member

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    Stav,

    Exactly, I'm prob going to register for Super in january (so happy to bounce ideas come the time).

    For the IP1 exam, the formulas are probably the biggest part/stumbling block of it so I'd pay particular attention to them (especially the ammount of compounding periods etc..)

    Gary.
     
  19. stav

    stav Member

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    Ta, thanks for that Garycon06. Hopefully pass first time round