You are a Financial Investment Counselor, and you have several clients who are working for a very successful technology company. Combined they have millions of dollars invested stock options, which are substantially in the money. You have warned them to some extent about the dangers of keeping all their assets in a single stock, and their reprise is that what other stock or portfolio could possibly give them the 40% annual return they have been receiving on their company's stock in the last two years. How would you reply, remember these are vested options but not yet exercised.
You are a Financial Investment Counselor, and you have several clients who are working for a very successful technology company. Combined they have millions of dollars invested stock options, which are substantially in the money. You have warned them to some extent about the dangers of keeping all their assets in a single stock, and their reprise is that what other stock or portfolio could possibly give them the 40% annual return they have been receiving on their company's stock in the last two years. How would you reply, remember these are vested options but not yet exercised.
since they are a very successful technology company, as they are a financial counselor they are looking forward to gambling and get a high return, I will suggest them to invest in a portfolio investment because it gives a 40% return on their investment
so, there are many factors we need to consider like tax planning needs, time, etc
modern portfolio theory is one of the theories in investing to focuses on maximizing your return without adding too much additional risk.
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