Five-year average return for each security
General Electric
Ford
Identify each company’s security
A security is a financial asset commonly known as a financial instrument. Securities are categorized into three debt security, equity security and derivatives security. The Ford Securities are the debt securities while the company’s security for General Electric is the equity securities.
Identify the securities’ industries
General Electric is a Conglomerate. Ford is in the automotive industry.
Determine the average five-year average return in each industry.
The automotive industry return on equity is at 12.4% by the end year 2015. The return on equity for the conglomerate is at 0%.
Identify three additional stocks in each industry and determine the five-year average return for each.
Under the conglomerate the additional stocks are
3M CO
Roper Technologies
Koninklinje Philips
Under the automotive industry, the additional stocks are
Thor Industries
Winnebago Industries
Toyota Motor Corp
Compare your securities’ performance to those in the same industry and industry average.
The automotive industry comparison
Thor Industry showed consistent percentage gain except in one year only. The highest return is at 47% gain higher than the industry average. Among the companies in the conglomerate the Roper Technologies exhibited percentage gains throughout the five years.
Determine whether or not changes must be made to your portfolio.
Therefore, I would review my portfolio by selling General Electric stock and Ford stock then buy the best performing stocks according to the analysis above. Thor Industry and Roper Technologies are the better investment options.
Reference List
1stock1. (2016, July 30). 1stock1. Retrieved from 1stock1: http://www.1stock1.com/1stock1_869.htm
Power, G. J., & M., C. T. (2015). Measuring infrastructure investment option value. The Journal of Risk Finance, Vol. 16 Iss: 1, 49 - 72.
YahooFinance. (2016, June 30). YahooFinance. Retrieved from YahooFinance: www.yahoofinance.com
