I. Introduction
1. Objective
Our portfolio objective is capital growth that aim to maximize the capital appreciation and the increase of the value of the portfolio over the long-term .It consists mainly of equity , certainly it has higher risk than the model portfolio but offer also a higher return .
2. Strategy :
Our portfolio consists of only stocks so it would be probably risky , then we try to reduce risk by making a diversified portfolio .
We buy stocks from secondary market : Dow Jones , NYSE and NASDAQ
We buy our stocks only when its market value is under its intrinsic value.
We hold our investments until it reach its intrinsic value .
Avoiding picking stocks that move very little
II. Initial composition of the portfolio
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Then the price reach the highest price of the 3 month 51,01$
Diageo PLC
23/10/2014:
the Holiday season are coming so Guinness & Co introduced a new product it was a limited edition of beer . The price share on October 22 was 112,03$ and it increased on October 24 to 114,70$
22/11/2014 was the launch of a new product and it was a new tasty of whiskey for Thanksgiving Eve and the price reach $120,54 on November 24
December 12 Diageo decide to expand their Learning Skills for Life hospitality program into Houston and the price reached the highest price $123,40 in this 3 months .
Walt Disney
21/10/2014
The Walt Disney Company in Shanghai and Shanghai Media Group decide to expand their relationship .
The price reached $ 89.93 on October 28 when it was $ 87.54 on October 21 .
06/11/2014
The Walt Disney Company reported earnings for its fourth quarter and fiscal year ended 2014. And it was noticed an increase of 0,12 . Then it allowed the price to reach 92$ the price per share.
Activision :
20/11/2014:
Announced for a new event which is the game ‘call of duty’ available now on Smartphone and
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Conclusion :
At first we were buying stocks based on the value of the stock meaning if the market price is lower than intrinsic value we buy (undervalued stock) if not we don't or we sell it if in custody.
We also used the criteria of which stock is giving us the higher dividends but we know now that those criteria are for those who didn't learn finance for example buying stocks because of dividend is for old people who wants to generate money for short period but our investment should look to the future so we have to focus on capital gain instead.
we learned also that there is no magical instrument or formula that indicates the best stock it is all about risk and return and with higher risks comes higher return.
losing money doesn't always mean you are bad investor or you did something wrong , you can't always anticipate the shifts of stock markets because it is sensitive to several constraints that neither a person or nation can control.
We now have a better vision of how to manage our portfolio when to hedge when to sell , when to buy. Also, we have to stay tuned to the news in every sector and try to speculate the effect of each events. In addition, we need to diversify and invest in more than one stock , the larger investments we make (in term of quantity) the lower risk. And the most important thing is to keep watching the portfolio and its evolution because each second count it is the thin rope between winning or losing