Equity Analyst Project - Individual Essay

Decent Essays
Equity Analyst Project - Individual Scott Hatten MBA 737-F1WW (W13) Professor Lauren Thomas March 2, 2013 This paper will assess my ability to maximize my personal return on investment with an allocation of $1,000,000. The overall goal of this exercise is to obtain the highest return possible within the next 12 months. I am limited to the following asset classes for allocation of all investments: * U.S. Equities * U.S. Treasury Bonds * Cash This paper will be my prospectus on the justification of the allocation and potential earnings in each class. | U.S. Equities | U.S. 30-Year Treasury Bonds | Cash | Proposed Allocation | 70% | 25% | 5% | $ Amount | $700,000 | $250,000 | $50,000 | Forecast +/- (12 Months) |…show more content…
U.S. 30 Year Treasury Bonds Although this investment class can be considered the most conservative of the three, the low yield of government bonds in the past 10 years does not lend a comparative metric against many other investment opportunities (Jacobs, 2012). The fixed rate of these instruments allows for a guaranteed return, but should only be utilized at a point in an investing cycle when risk is higher than potential income growth. The 25% allocation that is invested in this class is positioned to provide a long term guaranteed investment, with the possible that these lower rates will not rise significantly in the next few years. Cash The lowest of investment allocation classes is cash. The cost to leave any instrument in this category is expensive and provides very little ROI. The funds kept in this allocation are specific for future investment opportunities where transition of funds from other classes could have a significant impact or cost to the overall 12 month plan (Mangla, 2012). Summary Looking back over the past ten years and most especially the past three years for investment returns and economic possibilities, there seems to be more growth in the past 24 months than what we have seen in over a decade. The rapidly changing international economic climate and the current government struggles with tax based polices and the continued climbing US
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