4 Aug 2022

122

The Interview: How to Ace Any Job Interview

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Academic level: College

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The interviewee has a generally optimistic opinion towards investment. According to him, stocks provide a relatively simple way to invest money. They provide an opportunity to own a part of a publicly held company. They can make a good investment depending on the state of company at the time of the stock purchase. Projections on company progress should also lead the decision. Bonds are a stable and guaranteed investment option. The investor is assured of how much they will earn irregardless of the financial situation. However, bonds are not as attractive as other options because of their low return on investment. Also, the issuance of bonds does not give additional income when the interest rates are favorable. The maturity date for payment is also fixed. 

Annuities are a great choice of investment because they are tax free. They provide guaranteed income just like the bonds. Many retirement programs invest their money in such funds. Annuities often given higher returns than bonds issues by governments. Many people prefer mutual funds because of the high amounts of money collected from different individuals. However, they carry a higher risk compared to the other three options. Most of the interviewees opinions were similar to mine. The only difference was that in my option, mutual funds offer a greater chance of success despite the associated risks ( Madura & Gill, 2016).  

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The interviewee acknowledged the importance of risk tolerance in that it guided the decision to take calculated bets or risks. Clients at different stages of their lives were seen to exhibit different levels of risk tolerance. The interviewee and I both agreed that emotions played an important role in the perception of risk. Madura and Gill (2016) argues that t he role of the financial adviser is to strike a balance between fear, risk and caution. The fear will be as a result of the perceived danger of money loss. 

This will make the client more cautious before they invest. The adviser then has the harder task of reconciling the clients fears and helping him or her choose a risk that will not destroy them financially. This includes investments that do not mature as fast as desired, and those that could incur heavy losses. 

Merton (2014) mentions that the interviewee considers retirement planning as simply joining a retirement benefits group. In my opinion, retirement planning means comparing one's source of income and calculating their expenditure. The author further states that this can be done by determining ones monthly expenditure against future needs. This amount is used to calculate what is needed to maintain the same kind of lifestyle after retirement. The interviewee considered inflation to be a serious problem that could erode the gains of the retirement plan. The factors I consider important are the support of additional funds such as is done in pension plans. The guarantee of financial freedom is also important. 

A retirement plan holds more weight in my opinion when compared to the opinion of the interviewee. The interviewee has a shallow concept of the steps necessary in the development of a retirement plan. A deeper understanding of the concept will guide the interviewee into giving a more informed decision. There was similarity in both my opinion and the interviewee's in that both acknowledge the effect of inflation in the viability of long term investment options such as retirement benefits (Merton, 2014). 

This assignment taught me that there is a gap between practicing financial advisers and those who have more of theoretical knowledge. The application of theory is useful in creating a deeper understanding of the different options available. It is also important to frequently go through the financial markets so as to broaden the knowledge base and working definitions of financial services and options. 

References 

Madura, J., & Gill, H. (2016).  Personal finance . Prentice Hall. 

Merton, R. C. (2014). The crisis in retirement planning.  Harvard Business Review ,   92 (7/8), 43-50. 

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StudyBounty. (2023, September 14). The Interview: How to Ace Any Job Interview.
https://studybounty.com/the-interview-how-to-ace-any-job-interview-essay

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