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Description: This is a project that incorporates a term paper and an investment portfolio of stocks and mutual funds, whose performance is researched and tracked to gain experience in investing. In this activity, you will invest $10,000 in three different stocks and one mutual fund and then track the stock market price of those companies for at least 14 days.
The idea here is to become familiar with creating an investment portfolio that meets your financial goals. Objectives: The objectives of this assignment are as follows: 1. Evaluate stocks and mutual funds as investments; 2. Apply diversification techniques and strategies in the creation of an investment portfolio; 3. Evaluate and employ various internet sites to answer financial planning and investment questions. Points: 20 Note: Please read Chapter 14 before starting this project. Instructions for Stock Investments:
1. Consider your investment goals. Then choose a few companies in which you think you would like to invest. Here are a few tools to get you started: a. Warren Buffet’s 15 Largest Stock Holdings: https://finance.yahoo.com/news/warrenbuffett-berkshire-hathaway-top-15-stock-holdings-153736237.html b. Yahoo Watch Lists: https://finance.yahoo.com/watchlists c. Top Ten Industries: https://bigcharts.marketwatch.com/industry/bigcharts-com/default.asp
2. Using an internet search engine, access each company’s Web site to gather as much background information as possible about the company, such as: a. Sector or Industry b. Description of the company c. Number of years in business d. Company news. Google News may be a helpful resource for finding out company information. Yahoo Finance is also a good resource.
3. Research the company’s financial condition, such as: a. Profit margin b. Return on Assets c. Return on Equity d. Quarterly Revenue Growth e. Current Ratio f. Recommended resource example: https://finance.yahoo.com/quote/AAPL/keystatistics?p=AAPL
4. Research the industry conditions. A firm’s stock price is susceptible to industry conditions. The demand for products or services within an industry changes over time. Competition is another industry factor that frequently affects sales, earnings and therefore the stock price of a firm. Access the numerous financial web sites that provide information on specific industries to do your research.
5. Research the U.S. economic conditions. Select any economic indicators that may impact your stock performance, such as the following: a. GDP/Economic Growth. Economic growth is measured by the amount of production in a nation. The GDP is the total market value of all products and services produced in the United States. b. Interest Rates c. Other Economic Indicators i. CPI Consumer Price Index ii. PPI Producer Price Index iii. Inflation Rate The following resources may https://finance.yahoo.com/ be helpful in researching U.S. economic conditions: https://www.commerce.gov/economicindicators, www.Bls.gov. Note: By analyzing the firm itself, the economy, and the industry, you can assess a firm’s future performance. This process enables you to determine whether to purchase the firm’s stock.
6. Review the information gathered and decide on three companies in which to invest. Find out the current selling price per share for each company’s stock. Decide how many shares of stock you want to buy in each company keeping in mind that you have only $10,000 to invest in both stocks and a mutual fund. Instructions for Mutual Fund Investments: 1. When choosing among mutual funds, you should select a fund with a required initial investment that you can afford, an investment objective that satisfies your needs, and a relatively low expense ratio. 2. Resources for finding a Mutual Fund: https://www.fidelity.com/fund-screener/research.shtml https://www.kiplinger.com/tool/investing/T041-S001-top-performing-mutual-funds/index.php Format: The Investment Portfolio Project Term Paper has two sections: Section 1: Research Summarize your research for each of the stocks and mutual funds selected. Discuss the firm itself, the industry and the overall economy which the firm operates in. Also, please discuss your investment strategy.
Section 2: Valuation Complete the Investment Portfolio Valuation worksheet (see Blackboard). Compare your ROI (return on investment) to the S&P 500, Dow 30 or Nasdaq. You may use the following benchmark links to compare your return to the market’s return: • S&P 500 https://finance.yahoo.com/quote/%5EGSPC/history?p=%5EGSPC • DOW https://finance.yahoo.com/quote/%5EDJI/history?p=%5EDJI • NASDAQ https://finance.yahoo.com/quote/%5EIXIC/history?p=%5EIXIC General Instructions:
1. The term paper must be typed.
2. The last (final) page should contain the citations. It must include proper citations of others’ work included in your paper using the MLA format.
3. Please submit this project via Blackboard before 11:59 pm on Monday, November 23, 202