Investment Portfolio Project

Investment Portfolio Project

Yunyoung Choi

1. Investment Objectives

One of my initial objectives/strategies was to diversify within the companies/industries that I was familiar with. So the first seven stocks I bought for my portfolio were APPL (Apple Inc.), DIS (The Walt Disney Company), MCD (McDonald’s Corp.), MSFT (Microsoft Corporation), BA (The Boeing Company), WMT (Wal-Mart Stores Inc.), F (Ford Motor Co.). I bought the stocks from the industries that I‘m interested in which are technology (APPL, MSFT), services (DIS, MCD, WMT), industrial goods (BA), and consumer goods (F).

However, as I started to lose money after investing in SCTY (SolarCity Corporation), I bought more stocks in the services industry because it’s the industry that I am most interested in and have knowledge about, and thought that I wouldn’t at least lose money if I invested in this industry with enough research. So in the end, I ended up with 69.3% of my stocks from the services industry, but still managed to gain profit.

Concerning market capitalization, I did not diversify and most of the stocks I bought and sold were large cap stocks, and the ones I have now are all large cap stocks. The reason for this is because I was risk averse. With this strategy, I did not earn that much return in the end, but at least did not lose money.

1. Portfolio Stats (April 24th, 2016)

Figure 1: Performance

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Figure 2: Industry

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Figure 3: HPR

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Figure 4: Transactions

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1. Risk Tolerance

I formed my portfolio with mostly low beta stocks so I was being risk averse. Most of the stocks bought had a beta smaller than 1, and the overall beta of my portfolio in the end was 0.79643. I didn’t bear that much risk, ending up with low return. (CAPM)

Figure 5: Beta

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        Also, all of my stocks in the end were from large firms, which shows that I preferred to take less risk even if I end up with less return.

Figure 6: Market Cap

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1. Securities Transacted

1. APPL (Apple Inc.) was one of the first stocks I bought. I bought it because the price had been dropping for quite a long time and I expected it to go back up. However, it continued to go down after I bought it, but then started going up after I sold it.

2. DIS (The Walt Disney Company) was similar with APPL. The price had been dropping since last December so I expected it to go back up. But I couldn’t wait and sold it, but the price is increasing now and I think should have kept it in my portfolio.