Hand in report 2: stock portfolio
A max 6-page paper (excluding front page, index, appendix etc.) about your Virtual Stock Exchange experience will be due May 29 at 13:15. Your report has the following structure:
exchange experience will be due May 29 at 13:15. Your report has the following structure: – Front page: student numbers, class, date, lecturer – Index
– Chapter 1: Development and explanation of your portfolio. o How it is line with your strategy. o Motivation of trading activities after the first portfolio selection (why did you buy these shares, e.g. P/E ratio?). Make sure you connect your reasons to your strategy!
– Chapter 2: Stock performance o Which positions exceeded your expectations? What conditions caused this? o Which positions underperformed for you? What factors created the performance gap? Remember to follow the news!
– Chapter 4: Result o Calculation of the % return of the portfolio. o Calculation of the % change of the index you use as benchmark. o Conclusion. Did you beat the market?
– Bibliography o Use APA referencing (also in text). If APA referencing is not used properly you get 1.0 point deducted from your grade.
– Appendix o Screen print of your final portfolio is put in the appendix o List of your transactions is put in the appendix o Report 1 is put in the appendix.
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Hand in report 1: stock picking strategy 3 pages excluding appendixes and bibliography
- Report 1 One page: – Description of investment strategy.
- – Description of selected companies (at least three) plus motivation why these companies are selected in the group’s portfolio. The choices must be clearly motivated.
- – Selection of a relevant stock exchange index you use as a benchmark. Also mention the height of the index on the day of your first transactions. – A screen prints of your initial portfolio.
- Fundamental analysis
- Based on the intrinsic value of the company
- Found by Present Value of Future Cash Flows
- Qualitative analysis
- Who, what, where, when etc.
- Value investing
- Try and find undervalued stocks, with P/E ratio etc.
- Growth investing
- Look for stocks of companies with growth potential (young industries/companies)
- GARP investing
- Growth At a Reasonable Price
- Combination of value and growth investing
- Income investing
- Stocks paying solid dividends
- Dogs of the Dow
- the 10 of the 30 companies in the Dow Jones Industrial Average (DJIA) with the highest dividend yield.
- Technical analysis
- select stocks by analyzing statistics generated by past market activity, prices and volumes
Purpose The purpose of using Virtual Stock Exchange is to give you a better understanding of trading strategies and portfolio management. You will also learn a variety of financial instruments and their risks and rewards as they apply to asset management. Project Overview and Goals Acting as a prospective portfolio manager for your clients, your potential clients have entrusted you with $100,000 to invest at your discretion for a period of four weeks. They are expecting you to invest their money wisely and profitably. Since your clients desire a high rate of return, you of course need to find a suitable strategy for the investments (see investments strategies module A). Additionally, your prospective clients are considering other asset managers (your classmates) and will be ranking each according to the success of their portfolio management. You will be able to track how you are measuring up throughout this exercise. The group that ranks the highest on May 23, 12:00 will get 0.5 points as a bonus. At the end of the trading period, if your clients are satisfied with your performance managing their portfolio, they will extend their relationship with you.
Specifically, they are concerned about the following criteria: · Returns o Absolute return: The total dollar increase in the portfolio over the trading period o Risk-adjusted return: The return on the portfolio taking into account the level of risk assumed by you, as measured by the Sharpe Ratio
Portfolio Management Constraints · Cash must not exceed 20% of your portfolio at any time. I want you invested, not sitting on the sidelines.
