Select six stocks to compose the initial holdings of your stock portfolio for yo
ID: 1226983 • Letter: S
Question
Select six stocks to compose the initial holdings of your stock portfolio for your project. Select three stocks from cyclical and three from non-cyclical industries. Collectively, they should form a portfolio consistent with your financial objective.
For your initial holdings, imagine that you have 1,00,000 dollars to invest. Choose a combination of 6–12 stocks, bonds, cash, and short-term securities that you believe are consistent with your objective. Act as if you have now purchased these items for your portfolio, using your 1,000,000 dollars.
Describe the objective of your portfolio.
Describe the investment style that will make your portfolio choices consistent with your stated objective.
Provide some general background information on macroeconomic, industrial, financial market, political, or other news events that might affect the risk and return of the portfolio.
Identify a benchmark portfolio (you might use S&P 500, Wilshire 5000, or Value-Line Index) against which to judge your portfolio's return performance. (In Units 3–5, you will maintain a weekly performance record for your portfolio in comparison with this benchmark.)
Describe the six stocks that will comprise your stock portfolio.
Provide a list of your initial holdings, giving a justification for each position. Comment on the diversification of your portfolio, in terms of allocation class, sector, and country.
Determine the market value of the portfolio, calculated as an average return, and record this value. Provide a benchmark market index as of the day you submit this assignment.
Describe the risk involved in this portfolio, and the investors for whom this portfolio is appropriate. Keep in mind that asset allocation should address the following factors: classes of investment assets, industry and sector considerations, country selection, and short-term versus long-term criteria.
The six stocks that will be in this portfolio are Ford Motor Co. , Toyota Motor Corp. , Fiat Chrysler, Valeant Pharmacuetical International, Pfizer, INC, and Eli Lilly and Company. That's the fartherest I've gotten on putting this portfolio together.
Explanation / Answer
Ford Motor Co. , Toyota Motor Corp. , Fiat Chrysler are the companies you have choosen
Other 3 we choose are
Valeant Pharmacuetical International, Pfizer, INC, and Eli Lilly and Company
Now we need to create portifolio with these stocks and your investments are roughly 1 million us
Here, you have to clearly state weather you want to create a portifolio that are risky or risk averse.
Every wealth management company which creates portifolio creates it on basis of risk, in the above the riskier ones are automobiles and non-risky ones are pharma companies
If you want to invest 30% in riskier assets which can yield more money then you can place 30% or 300,000 in automobile shares starting with ford motor, chrystler and toyota
Remaining 70% will be parked in pharma shares which are much more stable and earn stable dividend, These pharma companies however yield less appretiation of share value as they have already peaked out.
Auto companies on other hand give lower dividends but have appretiated a lot since the 2008 crisis.
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