Analysis: Creating And Congruent With The Investment Process

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Creating and congruent with the investment process
On the basis of Mauboussin and Callahan (2015), the investment process could be divided into two sections, including short term and long term process. It is unwise to merely utilise short term or long term process because the market mispricing is unavoidable, and both short term and long term investment processes are essential. Additionally, different situations require different kind of investment plans. For example, the ever-changing industries, such as the LED industry, need the short term investment processes instead of a ten year plan. On the other hand, the emerging industries require a relatively long period to increase the value, and in that case the long term plans might be suitable.
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In addition to the creativity, investment managers and companies should behave in accordance with their process (Mauboussin and Callahan 2015). In general, the managers are likely to introduce their investment process to the potential clients but they might behave differently in reality. For instance, if managers believe that the change of portfolio might generate more profits, they may discard the initial investment plan. It seems that the potential income might be increased, however, the risk of the portfolio will increase at the same time. Borek (2014) points out that the risk management will exert significant impacts on the value. Furthermore, the appropriate risk management could improve the quality of decisions, and it is likely to minimise the fluctuation of the cash flow and the value if the risk management is ignored. Therefore, in order to maximise the value, the consistency of their behaviours are necessary for the …show more content…
Hodosi and Rusu (2013) state that exact positioning is one of the most significant factors for investors to realise their expectations. Moreover, the investors are able to familiarise themselves with the market condition by the exact positioning, and it is easier for them to control the familiar situations. According to Mauboussin and Callahan (2015), the ideal clients could understand and support the decisions from financial managers. In addition, the behaviours would affect the results heavily. For instance, the unexpected behaviours, such as opposite behaviours, are likely to exert negative impacts on the results. In order to avoid the risks from clients, financial managers have to focus on market funds with great promise or seek the variable perpetual capital and instruments. Furthermore, the skilful and patient communications with the clients would also be helpful because different clients may have different preferences. For example, transient investors are in favour of the forecasts but the long term investors would analyse both historical and current date to make their decisions. As was indicated in Gil-Pechuán (2013), Masa Maso is a company which is aimed at providing luxury clothing to the upmarket customers. However, they mistakenly positioned the distribution channels and use the internet to accept the orders. Unfortunately, upmarket customers

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