Stock Trak Investment Report [Portfolio Investment Analysis] Portfolio management is an important factor that determines the performance of the portfolio. To perform well in the portfolio, it is not only essential to develop personal investment strategies, but analyzing current financial trend is also vital. Stock Trak is an online portfolio simulation that allows students to try out different investment strategies, and also get a hand on experience in what the real market trading conditions are. By managing the portfolio, I have acquired some new knowledge of investment strategies and also become more familiar with the current market by following closely to the financial headlines.
Robust Optimization Approach to Multi-Period Portfolio Selection Progress Report Introduction Investors always seek for a way that they can get back greatest return while enjoying minimized risk. Instead of investing in a single asset, holding a portfolio is obviously less risky. However, how to select the best portfolio among tens of thousands of assets in today’s financial market? The stringent need of investors promote the raising of modern portfolio theory. In 1952, Harry Markowitz  established the fundamental model of modern portfolio theory: the Markowitz model, also called the mean-variance model. This model aimed to achieve a tradeoff between the expected return and the risk of return. As shown in Figure 1, among all efficient portfolios, the efficient frontier consisted of all those with highest return at each given risk level. C_1,C_2,and C_3 were the investors indifference curves which showed that traders prefer portfolios with high return or low risk. The tangent point R of the highest indifference curve and the efficient frontier gave the optimized portfolio.
EBMA Level 8 Diploma in strategic Business Research and Leadership Direction Unit Title: Strategic Financial Analysis and Planning Table of Contents Executive Summary 3 1.Critique and evaluate research ....... 4 2.Critically apply modern financial tools 6 3.Use main types of investment appraisal tools 8 4.Critically evaluate the importance of research 10 References 11 Executive Summary The decision making of management is
Executive Decision: This was a simulation project related to application of different tools of portfolio management. The project was applied by using stocktrak.com platform. This website provides the students and teachers with a real time simulation platform for learning the portfolio investment. A specific allocated amount was used in this simulation project for portfolio investment. A portfolio was created of different securities like stocks, bonds and currencies. These bonds and securities were from different sectors of economy like technology industry, financial industry, consumer goods industry, services industry, health industry, industrial goods industry, utilities industry, and basic materials industry. The top performing stocks in this simulation project were Bank of America Corporation, Hersha Hospitality trust, Deans Food Company, Loews Corporation, and Pepsi Co Inc. The study also found that the percentage return on portfolio remained above the return realized on Dow Jones ETF during the timeline of the project.
As capital markets analysts, it is our sole duty to ensure the happiness of our clients and investors through rigorous financial models of a particular company’s stock for the purpose of forecasting its future trends, and ultimately leading to a recommendation of whether that particular stock should be bought or sold. In the general sense, a successful long-term investment strategy involves the following characteristics: selecting a comprehensible investment, investing early and taking appropriate risks, establishing a cash-flow plan, making stocks the central focus while also taking into account diversification, and achieving an effective balance by investing in bond funds for a safety net. It is also imperative to use tax advantaged investment
With Reference to this statement, describe, discuss and illustrate the principles of portfolio theory. Your essay should include coverage of the Markowitz Efficient Frontier and the Capital Market Line.
Active investments – A portfolio structure based on share analysis, new information and risk/return preferences (fundamental and technical analysis to support investment decisions)
This theory is proposed by Stephen Ross in the years 1976 and this theory is based on an assets returns or assets portfolio where the relation of an asset and common risk factors is clearly predicted.. The sensitivity of each factor would changes is represented by a factor specific beta coefficient. This theory also discuss about the price of an expected assets will be predicted whether it is mispriced or not. The formula of APT are about the expected return on a stock or other security and it is calculated as shown below:-
CHAPTER 1 INTRODUCTION INTO RISK-FACTOR BASED PORTFOLIO INVESTMENT STRATEGIES 1.1 What is factor-based investing? Consider one of the most urgent problems of modern financial management, namely portfolio management. Analysis of this issue primarily is interesting for the head of analytical department of banks and investment companies and private investors.
Investment has become a growing tendency and a method for people dealing with their income, while portfolio is an important investment vehicle. In the same time, financial services industry has played a critical part in making investment portfolio available to ordinary people. In this essay, the meaning and functions of portfolio will be analyzed and it will argue the advantages of the financial services industry outweigh the disadvantages.
Harry W. Markowitz, the father of “Modern Portfolio theory”, developed the mean-variance analysis, which focuses on creating portfolios of assets that minimizes the variance of returns i.e. risk, given a level of desired return, or maximizes the returns given a level of risk tolerance. This theory aids the process of portfolio construction by providing a quantitative take on it. It integrates the field of quantitative analysis with portfolio management. Mean variance analysis has found wide applications both inside and outside financial economics. However it is based on certain assumptions which do not hold good in practice. Hence there have been certain revisions to it, so as to make it a more useful tool in portfolio management.
Analysis on maximising investment returns in financial markets Introduction Portfolio optimisation is a method of calculating and generating the maximum profit for the investors by allocating the initial capital into various asset classes. During the procedure, investors must consider the rate of return as well as the potential financial risks that could affect the expected value and accuracy of asset allocation decisions. Markowitz’s Modern portfolio theory builds up the foundation of solving portfolio optimisation problem nowadays using standard deviations to estimate the span of risk where investments with higher returns tend to have more risks accordingly.
The value of diversification Introduction Every finance students have learnt diversification is to reduce total risk by investing a basket of assets in portfolios. But what contributes to the success of portfolio diversification? A large number of assets? A variety types of asset allocation? Adding international investment? Numerous of risk factors? They are all indicators of a well-diversified portfolio. In this case, we will discuss about the advantages and disadvantages of diversification in portfolio management with related indicators. On one hand, some mention dynamic and numerous assets allocation in the portfolio will reduce both risks. While some also state the benefit of introduce multi-factor portfolio pricing models. On the other hand, arguments arise demonstrating adding international investment may disappoint investors because foreign market could be correlated and moved together. Another disadvantage could be the correlated assets collected weaken the effect of diversification. At the end, a balanced conclusion will be drawn to support the useful diversification.
Introduction and Definitions: Depending on whether believing in the Efficiency Market Hypothesis, portfolio strategies are classified as either active strategies or passive portfolio strategies. Active portfolio strategy doesn’t believe Efficiency Market Hypothesis, it uses available information and forecasting techniques to seek better performance than the average market, the aim of this strategy is also known as ‘beat the market’. Whereas passive portfolio strategy treats the market as efficient and believes it is not possible to beat the market returns
Portfolio management is making decisions in relation to investment mix and policy, asset allocation for individuals and institutions and balancing risk against performance. This includes the strengths, weaknesses, opportunities and threats in the choice of domestic vs. international, growth vs. safety, and many other trade-offs encountered in the attempt to maximize return given the client’s risk tolerance. (Haughey, 2014)