An investment strategy is a portfolio allocation or a management plan that is aimed at equating risk to returns. It involves dividing diversified investments equally between fixed income securities and equities. For a comprehensive understanding of an efficient market, we consider two global investors; these are Blackstone Group and Morgan Stanley's. We shall explore the various investment strategies applied by these firms in their daily operations.
The two firms have joined to form a joint venture and operate in the real estate industry where they have invested at least $170 million each. In their growth trend, these two companies have exploited both diversification and information efficiency principles of investment. These two strategies have been applied simultaneously. In the past, these companies concentrated on development of office complexes and large-scale untested residential properties, for instance they invested $90 million jointly for the development of Mumbai office complex. However, this has changed exhibiting diversification strategy. Currently, these firms are concentrating on actual properties that are preleased or presold sold before construction is completed and thus the investment does not hold their capital for a long time.
The change of investment portfolio has been facilitated by information efficiency. Real estate market prices reflect the quality of the property being traded, and this is the reason these properties are purchased before they are completed. In addition, because of this information efficiency, the real estate investors are able to maneuver between the available investments portfolios.
The two strategies applied are among the ones we have studies and hence I can confidently infer that they are consistent. The person narrating this is Shirish Godbole. He is the head of Morgan Stanley Real Estate Investing in India, and he would not have any ill motive. These two strategies have successfully worked, and thus I would recommend them to family members.
Anand, Shefali . Global Investors Take Fresh Angle in India. 4 December 2012. 13 March 2013 <http://online.wsj.com/article/SB10001424127887324355904578157350230019718.html>.