Reference no: EM133072653

Imagine that you are a financial advisor and a client has come to meet with you to review his portfolio's performance over the last year.

While the returns of the client's portfolio have matched the market and he is invested in accordance with his risk tolerance, he has heard that some of his friends last year have achieved above market returns due to choosing individual stocks or fund managers and he is upset with you that he has not achieved the same above market returns.

He has heard that the 30-year rolling average for the S&P 500 is 10% and believes his portfolio should achieve that or higher each year.

The client has 50% of his portfolio in his own tech company's stock, and he is extremely hesitant to diversify.

During the meeting you see the client constantly checking his phone to look at stock prices.

Additionally, the client is seriously considering quitting his job with the larger company, withdrawing 50% of the diversified portfolio he has with you, and using his time, money, and effort to start a brand-new software business.

Suggest a letter to the client advising him on how he should think about his portfolio, what to do with his concentrated stock, how often he should check his stock prices, and whether or not to quit his job and start a new company.