Financial Analysis of a Portfolio - 1760 Words

Overview From September 3rd, 2015 to October 28th, 2015, our group was given the opportunity to manage an investment portfolio, with the goal of maximizing the value of the portfolio through acquiring, holding, and selling stock. The beginning cash balance of the portfolio was $100,000, and our group had the ability to make up to 500 trades. During this time period, our group made 20 stock purchases and sold stock twice. At the close of business on October 28, 2015, the value of our group’s portfolio increased from $100,000 to $106,785.33, yielding a return of 6.78% (((106785.33/100,000)-1) x 100)). In comparison to the SP 500 returned at 7.16% and the Dow Jones having a return of 8.65% (Yahoo). Strategy We attempted to build a†¦show more content†¦Home Depot’s stock posted a beta of 1.01, which means the stock moved almost identically with the market. With this blend of volatile and less volatile stocks, the group was able to take some chances while still anchoring our return to the market to ensure a competitive return. Further, our strategy involved paying attention to current events and attempting to use them to generate a return. For example, Horizon Pharmaceuticals’ stock price took a nosedive after an October 19th New York Times article suggested that Horizon was attempting to thwart Express Scripts’ attempts to lower the price of prescription drugs. The decision was made to buy 100 shares of stock in Horizon when its price spiraled down to a measly $14.62 per share, as we expected Horizon would do something to stop the bleeding, and historically has been a pretty volatile stock. Horizon came back with a scorching rebuttal in an open letter later that day, spiking its stock price more than 30% on October 23rd, and by October 28th, this move landed us our greatest return of any stock that we purchased and held until the end of the period: 18% (see appendix). One sale that the group made over the two months was on October 12, when we sold 25 shares of Amazon stock. When the stock was sold it was worth $550.19, which was up $30 from when it was bought. The group decided to sell the stock at this point as, it had netted a decent return andShow MoreRelatedBenefits Of The Financial Services Industry Outweigh The Disadvantages1396 Words   |  6 Pagestendency 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. 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