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Tactical and strategic asset allocation for Financial Planning MCOM sem 1 Delhi University

Tactical and strategic asset allocation for Financial Planning MCOM sem 1 Delhi University

Tactical and strategic asset allocation for Financial Planning MCOM sem 1 Delhi University:-

The Department of Commerce was established in 1967 with the renowned flagship post-graduate programmeMasters in Commerce (M.Com). Apart from the other post-graduate and research courses M.Com is the most exalted two year full time post-graduate programme in commerce. The course provides an extreme and rigorous base for teaching, research and allied business administration. The programme is well received in the industry and for years had been serving the needs of managerial cadre in Indian Inc. The course serves the needs of academics and prepares students for research and teaching. The Alumni of this course are well placed in business, academics and administration in the country as well as abroad.

In the year 2009, this course was changed from annualized to semester mode dividing the whole course into 4 semesters. During the semesterization of the course, the then existing curriculum (annual mode) was adopted for semester mode, without any change. Moreover, in the light of augmentation in the field of commerce and business, the syllabi have not been updated since long. Thus, in view of widening the scope and depth of the course and inclusion of research paradigms of commerce stream, the overall structure of the course has been changed. Further, the overall structure has been improved to provide an insight of research in commerce and interdisciplinary areas and to facilitate those students aspiring for direct Ph.D. admissions.

As per the new structure, there are 5 papers in each semester. In the second year, there are 2 compulsory papers in each semester. As per the area of interest, the students are required to choose two optional groups- one major group and one minor group, in the beginning of 2nd year. The major group shall consist of 4 papers and minor group of 2 papers to be studied in 3rd and 4th semester. The structure for the groups has been designed with intent to provide advanced level specialization in the respective field.

Tactical and strategic asset allocation for Financial Planning MCOM sem 1 Delhi University

M.Com. Programme Structure

AFFILIATION

The programme shall be governed by the Department of Commerce, Faculty of Commerce and Business, University of Delhi, Delhi – 110007

Programme Structure

The M.Com. Programme is divided into two parts as under. Each Part will consist of two semesters.

SemesterSemester
Part – IFirst YearSemester ISemester II
Part – IISecond YearSemester IIISemester IV
  • There will be 4 lecture hours of teaching per week for each paper
  • Duration of examination of each paper shall be 3 hours.
  • Each paper will be of 100 marks out of which 70 marks shall be allocated for semester examination and 30 marks for internal assessment.

The schedule of papers prescribed for various semesters shall be as follows:

Part I: Semester I

PAPERSMarks Total

Marks

Duration

(Hrs)

Credit

(Hrs)

Paper NoTitleWrittenInternal Assessment
4101Business Statistics703010034
4102Managerial Economics703010034
4103Managerial Accounting703010034
4104Financial Planning703010034
4105Organisational Theory and Behaviour703010034
Total50020


Part I: Semester II

PAPERSMarks Total

Marks

Duration

(Hrs)

Credit

(Hrs)

Paper NoTitleWrittenInternal Assessment
4101Business Statistics703010034
4102Managerial Economics703010034
4103Managerial Accounting703010034
4104Financial Planning703010034
4105Organisational Theory and Behaviour703010034
Total50020

Tactical and strategic asset allocation for Financial Planning MCOM sem 1 Delhi University

In simple terms, asset allocation refers to the balance between growth-oriented and income-oriented investments in a portfolio. This allows the investor to take advantage of the risk/reward tradeoff and benefit from both growth and income. Here are the basic steps to asset allocation:

  1. Choosing which asset classes to include (stocks, bonds, money market, real estate, precious metals, etc.)
  2. Selecting the ideal percentage (the target) to allocate to each asset class
  3. Identifying an acceptable range within that target
  4. Diversifying within each asset class

Minimizing risk while maximizing return is any investor’s prime goal, and the right mix of securities is key.

Of course, the appropriate mix for a particular client depends upon many of the factors discussed in the Analyzing Your Client’s Profile section, including risk tolerance, time horizon and financial goals. For example, an IA with a client who owns commercial real estate properties or a number of rental homes would probably not recommend REITs or other real estate securities in the portfolio. Asset allocation is explained in detail later in this section.

Tactical and strategic asset allocation for Financial Planning MCOM sem 1 Delhi University

Risk Tolerance
The client’s risk tolerance is the single most important factor in choosing an asset allocation. Most IAs will create a risk tolerance questionnaire (or use one provided with their financial planning software) to make sure they have an accurate measure of risk. At times, there may be a distinct difference between the risk tolerance of a client and his/her spouse, so care must be taken to get agreement on how to proceed. In addition, risk tolerance may change over time, so it is important to revisit the topic periodically.

Time Horizon
Clearly, the time horizon for each of the client’s goals will affect the asset allocation mix. Take the example of a client with a very aggressive risk tolerance. The recommended allocation to stocks will be much higher for the client’s retirement portfolio than for the money being set aside for the college fund of the client’s 13-year-old child.

Tactical and strategic asset allocation for Financial Planning MCOM sem 1 Delhi University

Strategic vs. Tactical Asset Allocation

  • Strategic asset allocation calls for setting target allocations and then periodically rebalancing the portfolio back to those targets as investment returns skew the original asset allocation percentages. The concept is akin to a “buy and hold” strategy, rather than an active trading approach. Of course, the strategic asset allocation targets may change over time as the client’s goals and needs change and as the time horizon for major events such as retirement and college funding grow shorter.
  • Tactical asset allocation allows for a range of percentages in each asset class (such as Stocks = 40-50%). These are minimum and maximum acceptable percentages that permit the IA to take advantage of market conditions within these parameters. Thus, a minor form of market timing is possible, since the IA can move to the higher end of the range when stocks are expected to do better and to the lower end when the economic outlook is bleak.

Tactical and strategic asset allocation for Financial Planning MCOM sem 1 Delhi University

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