How would you answer "How would you invest $10,000?"
I have an interview coming up in an asset management equities group at a large bank, how would you answer this interview question?
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Personally, I would answer something along the lines of "I would invest 35% in indexes to gain exposure to the overall market, another 15% in REITs and then the remaining 50% would be allocated within -- sector which I follow closely and have a higher percentage of success in identifying attractive opportunities." You could even throw in some part of running it through a portfolio weighting optimization algorithm to select the weights.
First you should ask about the time horizon and goals of the portfolio, then answer based on their answer
Absolutely right. Investing in a vacuum is meaningless. Has to be goal / objective based. Risk tolerance, time horizon, taxes, etc. I actually get asked this by clients all the time, "What should I do with $X?" I always answer by saying something like, "That depends on lots of variables. Let's discuss the purpose of this money and / or your overall goals, objectives, and concerns."
Actually no way to know how to invest without that info.
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