Investment Portfolio
Introduction
Finance is a broad field in which there are numerous things stride upon. Finance and accounting is defined from two different aspects and both of them have their own significance and importance in particular. Accounting is the name of recording and interpreting daily data and information of the company, while finance is the name of better utilizing of company’s funds in different areas such as numerous business practices, operational activities, making purchases and investment to capitalize their funds .
The essence of financial modeling is increasing day by day in number of countries across the globe, as it is something related to the behavior of the financial market accordingly. The field of Portfolio management is yet another important field from the viewpoint of Financial Management and the provision of the same cannot be disregarded from any angle . Portfolio Management is all about managing or building a certain portfolio of assets classes under which specific amount of investment could be included accordingly.
The main perspective of this assignment is to make a portfolio having different securities pertain to different companies. There is an initial investment of US$ 50,000 from which different stocks can be selected. There are five different stocks that have been taken into consideration to complete this particular project in a well organized and perfect manner. It is also required to buy at least 100 stocks of a single company. The name of the companies which have been selected to perform certain investment are mentioned below
- Ford Motor Company
- Alcoa Inc Company
- Bank of America
- Newfield Exploration Company
- AT&T Company
There is a total investment amounting to US$ 50,000 and all of these things would be considered accordingly. The bifurcation of the stocks is mentioned below adjacent to proportion of total share revenue.
At & Co. has the highest amount of shares. A series of around 24 months prices have been taken into account for the same analysis, which have standard deviation as well as mean return. The mean return and standard deviation of all of these five stocks are mentioned below in the table and mentioned in the graph as well.
Portfolio Return and Riskiness
The above mentioned table illustrates that the investment has been bifurcated accordingly. In Ford Company 11.57% of the investment has been allocated and AT&T has the highest proportion in total amounting to 47.07% in particular. Newfield Exploration Co is on the second position which has a total proportion of 20.55% followed by Bank of America which has a total share proportion of 16.77%. The total Portfolio return in this particular provision is 0.15%, while the riskiness in these companies is 0.56%. If the investor would invest in the same direction, then the chance of enhancing the return and mitigating the expense would certainly be increased accordingly and effectively.
Initial Investment = $ 50,000
Portfolio Return = 0.15%
Return in $ = 50,000 * 0.15% = 75$
Total Return in $ = 50,075
The investor would get extra advantage by investing in these companies with the same proportion and mentioned above return could be getting comprehensively.
Conclusion
If investment could be done in the same provision and all of these companies, then it would certainly be effective for the investor.
References
Frank Reilly, K. B. (2011). Investment Analysis and Portfolio Management. London: Cengage Learning.
John L. Maginn, D. L. (2010). Managing Investment Portfolios: A Dynamic Process. New York: John Wiley & Sons.
Appendix
