FINANCIAL INVESTMENT PROJECT

Financial Investment Project

Financial Investment Project

Investment Philosophy.

        My investment philosophy is based on the top down approach. I have a growth strategy and a semi-efficient view of the market.

        I have invested 100% of my portfolio in equities for several reasons: higher profitability of equities comparing to other types of assets, high equity yields and competitive advantage.

Original Portfolio.

        I have concentrated on two markets in my analysis: UK and Russia. Economic analysis of these countries showed that there are lucrative and in many ways unique investment opportunities in both of these markets. The following passages of my work I spend on the analysis of the specific industry sectors and companies which I have chosen to invest in.

Rebalancing.

        That part of the work was based around detailed explanations of the reasons for exchange of my assets. The market situation underpinning these decisions.

Performance Measurement.

1st Period:

Old Total Value of portfolio: £50,000

New Total Value of portfolio: £ 43,500.45 ?£6500.55 ? 12.9%

Compared to a benchmark: World Equity Index = ?1.36%

? 12.9% < ?1.36% - underperformed the index by 11.54%

2nd Period:

Old Total Value of portfolio: £870.45 (first period)

New Total Value of portfolio: £905.88 ?£35.43 ? 4.07%

Compared to a benchmark: World Equity Index = ?2.77%

?4.07% > ?2.77% - outperformed the index by 1.3%

Whole Period:

Old Total Value of portfolio: £50,000

New Total Value of portfolio: £4905.88 ?£194.12 ? 9.4%

Compared to a benchmark: World Equity Index = ? 1.37%

?9.4% < ?1.37 - underperformed the index by 10.77%

Risk Analysis.

My portfolio was a subject to several risks, which included:

        Inflation Risk Currency Risk

        Security-Specific Risk

        Interest Rate Risk Market

        Liquidity Risk

Lessons Learned and Future Strategy.

I have greatly enhanced my analytical skills.

        I would definitely apply a more conventional approach to investments. I have a particular interest in India's technological stocks and the Russian bond market.

        investments in Russia

1. Introduction. (Investment Philosophy and Assumptions)

My investment philosophy is centred around a top down approach, oriented on the "bull" market. When using this strategy investor first looks at an individual country's performance, analyses specific sectors and than picks the most attractive assets within those industries. I have a semi-efficient view of the market, which means that all the assets traded in the market incorporates all the publicly available information. I hold semi-efficient view because there is a potential for anomalies, such as special situations, neglect, low P/E, earnings surprises, etc. For example, I have chosen Man Group because I was tipped over by my friend who is an investment banker that there is a great chance that the company can be taken over. In that sense it is a special situation, because if the events would unfold the way I planned I would make quite a good profit instead of making a loss. Another, example is Norilsk Nickel which according to my opinion is a neglected company capable of producing outstanding results.

I have decided to concentrate my portfolio investments in equities because of several reasons. One of them is the fact that over longer term equities are the most profitable assets, however they are also the most volatile ...