Welcome to the investment and portfolio management capstone course. I am Professor Jill Foote, and I teach investment management to MBA students at Rice University. I'm honored to be your instructor in this course. Over 30 years of working in and teaching finance, I have discovered that the best way and perhaps the only way to really learn investment management is through hands on experiences. Course learning is great but you need to actually experience the thrill of winning, as well as the challenges of losing in a real world portfolio to truly understand what investing is all about. As a result, this capstone course is designed to put your investment and portfolio management knowledge to the test through five weeks of hands on investment experiences. You will be managing your own $1 million simulated investment portfolio. As part of this, you will research and develop your own strategy and asset allocation. You'll develop a macro economic and market view. You'll be forecasting investment returns. You'll trade in your portfolio. And finally, you will analyze performance in terms of risk and return. The end result is going to be a peer graded final report which can be shared with family friends, potential or current employers. Along the way, you're also going to be advising case study clients on a variety of investment topics including behavior of finance, selection of investment styles, dealing with market dislocations, and performance analysis. This is an experience which will further enrich your hands on learning. You're also going to have the terrific opportunity to use sophisticated web based analytical tools of silicon cloud technologies portfolio visualizer. These tools will include portfolio mean variance optimization, historical and forecasting efficient frontiers, family french factor models, and many more. Now let's take a look at how these capstone experiences are directly applicable to managing real world investment portfolios. The capstone is organized into five modules. Module one is asset allocation strategies. In this module capstone learners will research, develop, and implement an asset allocation strategy. For that $1 million simulated policy portfolio I've already mentioned, using a provided list of ETF assets that cover US and global equities, fixed income, real estate, and other commodities. In module two, which is focused on the macro view, forecasting, and tactical shifts. Students will analyze and develop a view on macroeconomic trends that impact the investment portfolio. We'll forecast near term returns on simulated portfolio assets. And we'll make any needed tactical shifts based on those forecasts to their policy portfolio. In module three, which is focus on behavioral finance. Learners will advise case study clients on changes needed to portfolios and investment behavior, based on behavioral finance biases or puzzles that are present. Learners will also be reflecting on their own personal biases, either experienced or expected. In Module four, focused on styles of investing. Learners will advise case study clients on various styles. Becoming familiar with the use of family french three and five factor models as well as cohort four factor model. In Module five, focused on performance evaluation. Learners will evaluate returns and risk on their simulated portfolios and will calculate and evaluate returns and offer alternative measures of risk in order to advise case study clients on portfolio selection. Module six will be focused on peer grading. Learners will give and receive feedback. Through the peer grading of two sim portfolio final reports which cover all five modules of the simulated portfolio activities. In terms of the format of the course, there will be weekly videos and reading. You will be using something called the simulated portfolio management system or SIMS, to manager simulated portfolio. There would be case studies that are graded based on multiple choice. And there would be a required weekly forum which you will discuss with your peers a particular topic that's associated with that week's activities. Every week of the simulated portfolio activity, there will be a self assessment. It's ungraded, but it will help you make sure that you are on track in terms of your understanding and comprehension. There's quite a bit of supplementary learning in these modules as well. That includes optional videos, optional reading, and reference materials. Additionally in the weeks of the semi available portfolio activities, there's all these weekly optional forums in which you can see peer advice or feedback in terms of your simulated portfolio activities. In terms of requisite knowledge, what you need to know to be successful at the capstone course. If you had taken the four courses taught by Professor Arzu Ozoguz in Coursera's Investment and Portfolio Management Specialization, you will be in great shape for excelling in this course. Otherwise, you need to have a basic working knowledge of finance in the following areas. Risk and return measures, efficient frontiers, correlation and diversification, beta. You also need to understand basic behavioral finance, investment styles and factor models. You need to have solid computer use in terms of Excel usage and web access and you need to have a knowledge of basic statistics. Please note, the capstone is focused on interpretation and application of investment management concepts. You're not going to need to do extensive calculations. Finally, in terms of what you will learn, by the end of this capstone project, you're going to have hands on experience covering the following topics. Asset allocation and risk management. Current market and macroeconomic trends. Forecasting asset class returns. The use of exchange traded funds. Behavioral finance. Investment styles and strategies. And finally, investment performance evaluation. Welcome to the investment and portfolio management capstone. I hope you are excited about improving your investment skills with real world knowledge and insights and analytical tools. This capstone's all about building a winning investment portfolio. Welcome again.
