Summary Report of All Trades: During the course of the course trading project, my portfolio returned a -4.74% return on equity investments over the contest duration. During that time period, I made a total of six trades – 5 buys and one sale. The stocks that I purchased for my trading assignment were: OMX - OfficeMax Incorporated YONG - Yongye International Inc AAPL – Apple, Inc…
I chose these stocks as a foundation for a diversified portfolio and would like to build positions in each company for long-term holdings targeting 5-10 years. With the exception of Yongye, these stocks are all industry leaders and corporate entities with large asset bases and established business/consumer products. I chose these stocks because I believe that they should not only outperform the market but also limit downside risk to preserve capital. Due to the requirements of the assignment, I chose my entry points for the stock purchases late in order to capitalize on building my position through purchasing at a lower initial price. Over the course of the investment cycle, from 5/27/2011 to 6/2/2011, the rate of return of each of these stocks can be seen charted in comparison to the S&P 500 Index, the Dow Jones Industrial Average, and the TSX Index. As can be seen in the chart above (from Yahoo Finance), YONG outperformed all stocks including the index over this period by a wide margin, up over 30% on the period. Unfortunately, due to the weight of YONG in my portfolio vs. the other equities, this gain was not enough to offset losses, particularly in OMX which underperformed the Indexes by around 10% in this same period. AAPL outperformed the Indexes by a small margin, around 2% during this period. GOLD tracked the DJIA with very little deviation from the Indexes during this timeframe. I attempted a second purchase of OMX during this period to average down my entry price per share after the decline. Table 1: Buy and Sell Orders executed over the course of the project. Table 2: Buy and Sell Orders executed over the course of the project. Table 3: Portfolio – trading performance over the course of the project. Investment Analysis: In building my portfolio for the trading project, I wanted to implement the basics of a balanced portfolio by building positions in different sectors for the purpose of diversification. My interest in YONG was for rapid growth and in expectation of press release activity favorable to the company, and the stock was able to produce 30% gains over the course of trading which I locked in by selling a portion of my initial investment. The GOLD position can be considered as a hedge and also as a long-term investment in the future of the mining industry. My analysis of Randgold indicated that by owning the actual real estate in which the gold and other precious mineral reserves were located, this was a significant and appreciable asset of the company that indicated an undervalued state in the appreciating precious metals market. Furthermore, the company has the facilities for R&D in the precious metals mining sector which few other companies possess. In similar motivation, I chose Apple (AAPL) because of the leading effect of the iPhone, iPad, and other products in reflecting consumer lifestyle innovation through technology. I am impressed with Apple’s minimal debt load as a company, their international expansion prospects for product sales, and the financial position of the company as reflected in cash on the books, growing sales, expanding markets, etc. This company is the largest in the world by market capitalization and the benchmark of the NASDAQ index, outperforming on the ability ...
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(Stock Market Essay Example | Topics and Well Written Essays - 1000 Words)
“Stock Market Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.net/music/37653-stock-market.
Name: Instructor: Course: Date: Stock market summary essay Introduction This essay seeks to relay to the reader a comprehensive summary of a stock market case. The case involves an investor who has $1 million and seeks to invest in various stocks of his choice.
The stock market can be very profitable but can also lead to losses. The stock market is very profitable creating a lot of interest to many people and though it may result in losses, there is a lot of benefit to the institutions selling their stocks, the individual that buy it and the governments of the various countries, making it one of the most popular earners.
The stocks were exchanged by the unofficial and unlicensed trade offices. The stock market was still not full-fledged developed but trading of shares was started by the unofficial proceedings. In the deficiency of suitable mechanisms, transparency and controls, the element of fairness was absent.
The movement of the stock prices is largely determined by the relative merits and demerits of the information and how it is going to affect the performance of the company which the stocks represent. Just the same way the predictability of the information is impossible as to whether it is good or bad, it is equally impossible to predict the direction in which the stock prices will move in the future based on such information.
The announcement that President Bill Clinton was going to be impeached, Scooter Libby's indictment, and in the aftermath of Hurricane Katrina the stock market responded by losing ground. But, in the above mentioned cases the stock market quickly recovered and made gains.
Commodities are traded in commodities markets, with derivatives are traded in a diversity of markets. The size of the worldwide 'bond market' is estimated at $45 trillion. The size of the 'stock market' is estimated at about $51 trillion. The world derivatives market has been estimated at about $480 trillion 'face' or nominal value, 30 times the size of the U.S.
In the context of business enterprises, it could be said to be a group of firms or corporations which have identical business structures and strategies, which make them amenable to more or less similar performances, considering the host of factors that impinge upon the business enterprises.
But even if the anomalies existed in the sample period in which they were first identified, the activities of practitioners who implement strategies to take advantage of anomalous behavior can cause the anomalies to disappear (as research findings cause the market to become more efficient)."
In order to make an investment, investors often reflect either risk averse or risk taking attitudes which depend upon their willingness to take the risks. Based on this assumption, investors rationally make decisions to maximize their returns and limit their risks.
If a person uses such information to buy or sell a company’s shares in the stock market this could amount to insider trading and which is a highly prosecutable criminal offence in the UK. (moneyextra.com, 2007)
For fair treatment of
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