STOCK SELECTION PROJECT

STOCK SELECTION PROJECT



STOCK SELECTION PROJECT

Purpose of this assignment is to invest $200,000 by forming the portfolio. Firstly? I have discussed general investment trends and environments and than shown how I made portfolio and invested $200,000 in order to generate maximum profits. Asset allocation is based on incontrovertible truth that the portfolio needs to be structured on basis that no one can predict future. THE colleague of mine predicted that S&P 500 would be up about 17% in 2010. He is now rationalizing his inaccuracy by blaming sub-prime mess. "If it hadn't been for that? I probably would have been right."

Asset Allocation Strategy Utilizing Bonds

To begin with? investors should decide on the strategy for allocating their assets. My choice is to use bonds. This way we can identify best manager for any particular category. Do not use index funds. Index funds are glorified traps in down markets. They are not actively managed? so no one is there to save investor in down markets. There is an active manager that is superior to any index fund.

Relying on market incentives such as the Tobin tax represents the simple policy tool for lengthening time horizon of international PI. It would provide new pools of finance that could be targeted to developing countries to compensate those harmed by financial instability and to finance long-term? real-sector development projects

Of all criteria? risk is by far hardest thing to figure out. While market is going up I have heard people say they could lose 20% before they would worry. Those same people started to panic if their portfolio was down 10%. amount of risk anyone can take tends to vary with market conditions? age and life experiences. It is usually safest to start with the portfolio that is more conservative than aggressive.

Structuring Portfolio

There are five basic asset classes that I recommend; stocks? bonds? cash? real estate and commodities. Don't try to time markets? because it doesn't work over an extended period of time.

Here are examples of "heart" of the portfolio. Think of previous funds as soul of the portfolio? but these are examples of core hybrid funds. The companies selected for portfolio creation are:

NAB

BHP BILLITON

CSL

ONE STEEL

MCQUAIRE INFR GROUP

TOLL HOLDINGS

ORICA

WOOL WORTHS

LEIGHTON HOLDINGS

WESFARMERS

heart of the portfolio consists of managers that can invest in any asset class. They can also be in foreign investments.

Bond Calculations

following TVM register values are also used in calculation:

n - Number of payments per year*.

i - Yield to Maturity.

PMT - Coupon percentage rate.

 [PRICE] key does not modify any memory register values. This function also calculates interest accrued since last interest date when key is pressed, and result is stored in K memory register. If you are using an algebraic mode, you can recall K register to retrieve accrued interest result. If you are working in RPN mode, this result is also placed in Y stack register.

Below, we demonstrate use of this function in both RPN and algebraic input modes.

What price should you pay on April 25th 2005 for the ...