How Should William Advise Mary Swanson Case Study

9. How should William advise Mary Swanson? Most importantly, should William advise Swanson to shift a large percentage of her portfolio funds from equities to corporate bonds?

Mary Swanson is a retired professor with a portfolio of more than 1 Million and she is a non-emotional decision maker meaning that she was affected by the news, but not as much as other clients like Bob Miller. She didn’t have any short-term liquid constraints and her investment horizon was 30 years and need of growth. She is deeply concerned by the news and media but is not emotionally overwhelmed meaning she was not influenced that much. Mary Swanson’s well-diversified portfolio contains 60% equities including 5% gold, 5% real estate and 50% small, medium and large cap stocks and 40% bonds. In bond part she has mostly corporate bonds and some guaranteed

The advice should be based on previous events and studies of the economic conditions and should have a logical explanation. Firstly, investment advisors should be honest and put clients interest before self-interest. Advisor’s should not think about compensation at all at this point but should take in consideration of helping investors to save their investments and overcome the crisis. The poor performance in the previous year made John William really scared and worried because he knew that really small and unexpected mistakes will lead him to go to jail, but John William knew that the crisis will stop at one point because of his experience and confidence and the economy will recover itself, so he knew that his investment strategy will not be influenced as much from the financial crisis. The best way to handle such situations is to not act with emotions and stick to your own investment strategy strictly. We must always learn from our own mistakes and other investment advisors