Legal and Regulatory Factors

Legal and Regulatory Factors - 2-1Legal and Regulatory...

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Unformatted text preview: 2-1Legal and Regulatory FactorsLimitations or penalties on withdrawalsFiduciary responsibilitiesThe Prudent Investor Rule normally applyInvestment laws prohibit insider tradingInstitutional investors deserve special attentions since legal and regulatory factors may affect them quite differently (e.g. banks vs. endowment funds). 2-2Unique Needs and PreferencesPersonal preferences such as socially conscious investments could influence investment choice.Time constraints or lack of expertise for managing the portfolio may require professional management.Large investment in employers stock may require consideration of diversification needs. Institutional investors needs.2-3The Importance of Asset AllocationAn investment strategy is based on four decisionsWhat asset classes to consider for investmentWhat policy weights to assign to each eligible classWhat allocation ranges are allowed based on policy weightsWhat specific securities to purchase for the portfolio2-4Exhibit 2.82-5...
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Legal and Regulatory Factors - 2-1Legal and Regulatory...

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