Essay on The Perezes’ Good Fortune Case Study

The Wall Street Journal and Barron’s are important mass media that may influence the financial market since they can shape the public opinion and influence decision making process indirectly. In case of Angel, these media may be useful since they provide latest information on changes in securities market and help to get insight into the security market and economy at large. Angel could also refer to other reputable sources of information, such as Business Week, Google Finance, and others, which could provide him with valuable information on the development of the economy and changes in the securities market. More important, mass media provide forecasts and the market analysis conducted by experts, whose opinion may be very helpful for such newcomers as Angel.

b. How might Angel be able to use the services of Standard & Poor’s Corporation, Mergent, and the Value Line Investment Survey to learn about the securities in the portfolio? Indicate which, if any, of these services you would recommend, and why.

Standard & Poor’s Corporation, Mergent and the Value Line Investment Survey may provide Angel with valuable information on the securities in the portfolio but Angel may face difficulties with the adequate understanding of the information and its right assessment. In other words, he may perceive information from Standard and Poor’s Corportion or Mergent, for instance, but fail to interpret it in the right way that may lead to erroneous decisions and, therefore, to financial losses on his part. Nonetheless, Angel may find the information from Standard and Poor’s Corporation, Mergent and the Value Line Investment Survey useful. At any rate, he will be able to rate his securities respectively to the rating of the respective institution, i.e. Standard and Poor’s, Mergent, or the Value Line Investment Survey.

c. Recommend some specific online investment information sources and tools to help Angel and Marie manage their investments.

In fact, Angel should focus on information sources which are less complicated for an untrained user compared to Standard and Poor’s Corporation and similar institutions. In such a way, Angel should focus on such media as online resources, including Google finance, Yahoo finance, Business Week, Wall Street Journal and others, which are available and comprehensible to average users. Hence, Angel will not have any difficulties with understanding the information he receives from these sources. At the same time, he can find easily any information he wants using these resources. However, as an inexperienced user, Angel may face certain difficulties with taking right decisions concerning the securities in his portfolio. Therefore, he would better refer to the help of a professional broker. Otherwise, he should analyze carefully the current situation in the economy, in the specific industry and analyze prospects of the specific securities in his portfolio before he takes a decision to use somehow those securities, to sell or buy securities and to take any other decision involving his securities. He should be very careful while using online resources because he should use reputable sources only, such as Wall Street Journal, for instance, or Business Week.

d. Explain to Angel the need to find a good stockbroker and the role the stockbroker could play in providing information and advice. Should he consider hiring a financial adviser to manage the portfolio?

In case of Angel, finding a good stockbroker would be the best solution for his securities portfolio. Being a person, who has little, if any, idea of the stock market, Angel will be unable to manage his securities portfolio effectively, while what he perceives as fortune in his portfolio may disappear in the matter of a day. The situation in the financial market may change rapidly and Angel will not have time to consider his decisions for days and weeks. Instead, he should be able to take a right decision in the course of minutes or hours at the most. In such a situation, the advice of a professional broker would be particularly useful for Angel because the stockbroker can not only preserve the capital Angel inherited but also multiply it.

e. Give Angel a summary prescription for obtaining information and advice that will help to ensure the preservation and growth of the family’s newfound wealth.

Briefly, Angel should hire the stockbroker, who may help him giving advices concerning the use of his securities from his portfolio. In addition, the stockbroker can prepare weekly or monthly reports on his securities in the portfolio. Thus, Angel will see the progress his wealth has made in the defined timeline. Regular reports are very important to ensure the preservation and growth of his capital but the main point is to find a good stockbroker, who could be reliable enough because the capital can be lost in a day or two, especially if securities in the portfolio are extremely risky.

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