Portfolio Construction and Investment Choices

This unit teaches students how to evaluate, select, and manage a range of investment options—stocks, bonds, funds, real estate, businesses, cash equivalents, and alternative assets—while considering taxes, timing, and risk. It builds on foundational investing concepts and prepares students to implement diversified portfolios and make informed buy/sell and ownership decisions in the final unit.

Learning Objectives

• Analyze risk, return, liquidity, and tax characteristics of major investment types (stocks, bonds, mutual/index funds, cash equivalents, real estate, business ownership, and alternative investments) and classify them by suitability for different investor goals and time horizons
• Construct diversified asset allocations and fund portfolios using target percentages across asset classes and justify selections based on investor profiles and retirement vs. non-retirement account considerations
• Evaluate purchase and sale procedures, costs, and timing for securities and property—including methods for buying stocks and bonds, calculating share costs, evaluating direct property investments, and planning business acquisitions—and identify common pitfalls to avoid
• Apply tax-awareness and risk-mitigation strategies by assessing tax consequences in retirement and non-retirement accounts, recognizing problematic practices (e.g., excessive trading, futures/options, certain MLM/franchise risks), and recommending adjustments to improve portfolio performance