Investment Objective Analysis
We worked together on their finance stock market project. We felt that our risk tolerance was different then it normally would be sense we had 500,000 to invest in the stock market compared to our own money. Due to the fact that this was fake money we found ourselves to be conservative as well as risky depending on the situation. We have been given three months to invest money in the stock market as well as with different types of investments such as shorting, limiting, etc and to come out with a positive return. Our strategy was to be in the top tier percentage in the class. We wanted to find stocks that would be unique and not as commonly owned compared to other students in the class. We focused our initial investments on ETF’s as we liked the idea of investing in a group of stocks instead of just one main stock. We also made sure that we had been diversified by investing in as many different sectors of the market as possible.
II. 10 Transactions Chosen and Why
1. SPY – S&P Depository Receipts
We Invested in SPY because we wanted to focus on investing in ETF’s. SPY is a sector of the S&P depository receipts and has companies such as Exxon Mobile, Apple and Microsoft as some of their holdings. Investing into SPY allowed us to invest into multiple well known stocks that create high rewards with low risk and volatility in one ETF stock.
2. MSFT – Microsoft Corp
We wanted out portfolio to be diversified and invested into MSFT. This was our main technology investment that came at a fairly cheap price.
3. SYY – Sysco Inc
We invested in SYY because after doing some research online and in the wall street journal we noticed that SYY executives claimed their end of the quarter earnings was double of what they expected and that they expected to make even more profit in the next quarter. We invested with hopes of hitting it big, however, SYY never took off and we were losing money for most of the time we held this stock in our portfolio.
4. PFE – Pfizer Inc
This was our original pharmaceutical investment at the beginning of our investing period. We bought this stock to be diversified because Pfizer is a very well known biopharmaceutical company known for developing drugs.
5. BRK’B – Berkshire Hathaway B
This was our most unique stock that we purchased for our portfolio during the investment period. While researching, we had found out that Warren Buffett is the CEO of Berkshire Hathaway. Knowing Warren Buffett, he is known for being the most successful investor in the world. He had announced that Berkshire Hathaway would be doing a 50-1 split. We decided to invest in his less expensive Berkshire Hathaway B stock which took off and we made a huge profit on the stock.
6. FSICX – Fidelity School St Strat Inc
We bought this mutual fund because we needed to have a portion of our investments in bonds. We purchased about 2% of our portfolio into this stock. The reason we purchased this mutual fund instead of a bond is because the mutual fund had multiple bonds instead of choosing just one bond. Also the mutual fund had very low risk as it slowly increased.
7. AAPL – Apple Inc
Originally we did not want to invest in Apple because it was a very expensive stock. However, when the I-Pad was released we felt that we would be risky and invest into Apple stock looking for a quick return to help us jump up the rankings.
8. UA – Under Armour Inc
We purchased Under Armour because in previous years we had learned that they were one of the largest entrepreneurship companies and we enjoyed their Under Armour products. We wanted to be a part of the Under Armour craze!
9. WX – Wuxi Pharmatech Cayman Inc
Strategically we invested in this fund when President Barrack Obama passed his health plan bill. We felt it would be smart to get on the health reform bandwagon and we purchased this stock.
10. VZ – Verizon Communications...
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