...FINANCE Investments and Portfolio Management Team Case Study Analysis Susan Griffin: Formulation of a Long-Term Investment Strategy TEAM X Case Overview Susan Griffin, owner and CEO of Griffin Incorporated, was planning to sell the company. Despite the success of her company, she was 62 years old and wanted to be free of the responsibilities and retire. Working with her bank advisors, indications estimated the sale to be worth about $10 million. She was currently earning good income from the operations of her company. Prior to the sale, most of her wealth was held in company stock; however, with the sale of the company most of her holdings would be converted into liquid assets that need to be invested and managed (See Exhibit 1 for Assets). Now Susan would need to decide how to allocate her investments in a way that would allow her to continue to live comfortably and also cover her family’s financial needs. Therefore, the analysis provided within the case study covers the method and recommendation on how Susan should invest and manage her portfolio and in what proportion the investment should be allocated toward the various options available. Key Assumptions In order to properly evaluate Susan’s scenario and develop her optimal portfolio, several assumptions must be defined. These assumptions are detailed in the list below: 1. Susan’s required annual income equates to $438,143 (before taxes)...
Words: 2500 - Pages: 10
...Firstname Lastname Instructor’s Name Course Number 21 July 2012 Investment Management Investment Fundamentals Investment is the process of employing saved money in financial institutions with the hope of gaining returns in the future. Investment management is the process of managing the money employed in financial institutions with the hope of gaining positive returns. The financial institutions are catalogued in a case known as an investment portfolio. An individual with saved money may opt to invest it in financial institutions as a way of adding value to the money. Investing for individuals involves identifying the sources of income for investment such as savings and loans from others. The individual then comes up with investment objectives that will guide his investment decisions. After the funds have been secured, the investor does a market analysis to determine which the best investment opportunities available are for him. A market analysis may be done through a “bottom top” approach or a “top bottom” approach. The “top bottom approach” starts from a macroeconomic level of the market and works downwards towards the different service sectors and industries, finishing with the specific corporate institutions and their portfolio. Once at the corporate level, the investor can decide which investments will afford better returns in the long run (Klammer 36). A competitive analysis is done by the potential investor to determine how his options stand against the other investors...
Words: 4835 - Pages: 20
...commits his funds to any investment in stocks, he must ensure that such stock is the type that is capable of satisfying his investment objectives. These objectives which vary from one investor to another include:- i) security (safety of capital invested) ii) adequate return on investment by way of dividends iii) growth prospects/capital appreciation iv) spread of risks, etc. The exercise of security analysis is based on the general assumption that the intrinsic value of a company can be discovered by an assembly and analysis of financial information relating to its operations. This then forms the basis on which the investor could evaluate each stock in the market and determine the extent to which it satisfies his specific objectives before deciding whether or not to invest. 2. STATEMENT OF THE PROBLEM A decision to invest in stocks, like any other investment decision, has a direct impact on the investor’s networth. The main issue which this study focuses on is to examine how prudently an investor can select securities based on conventional objective criteria so as to improve his networth. Consequently, some relevant research questions that direct the study include:- - determining the profitability of the companies whose studies are being offered to the investor and likelihood of maintaining or improving upon such performance. - determining how well the stocks perform in earnings or income...
Words: 10029 - Pages: 41
...Shortlisting Companies for Detailed Analysis This article is a part of the series of articles "Selecting Top Stocks to Buy". In the first article of this series (Getting right perspective towards Investing), we discussed about getting the right perspective towards stock investing and the requisite qualities for becoming a successful investor. In the second article of this series(Choosing the Stock Picking Approach suitable to you), we learned about different stock picking approaches available to an investor and the guidelines for selecting the stock picking approach suitable to her. The current article in this series, aims to highlight the necessity of shortlisting a few companies for detailed analysis, out of the thousands of companies available to an investor. We would also learn about various tools, which an investor can use for shortlisting these companies. As per Bombay Stock Exchange website, at September 14, 2014, there are 5,471 stocks available for investing. Each of these stocks represents a company running a unique business. Business of each of these companies is different from all the other companies whether they are from the same or different industries. For example, a pharmaceutical company will have a business entirely different from a telecom company. Moreover, within the pharmaceutical companies, a company selling its products in Indian market will have a very different business from another company, which sells its products in overseas markets...
Words: 1651 - Pages: 7
...SHRI RAM COLLEGE OF COMMERCE A STUDY ON FACTORS INFLUENCING INDIVIDUAL INVESTOR BEHAVIOUR Project work Paper No. – CH 6.3 (b) (Submitted for Partial Fulfillment Towards Requirement of B.COM (HONS.) Course) Ashvi Mittal 12BC136 12072204129 E-21 2014-15 UNDER THE SUPERVISION OF Miss Ankita Tomar Assistant Professor Department of Commerce Shri Ram College of Commerce University of Delhi 1 DECLARATION BY STUDENT This is to certify that the material embodied in this study entitled “A STUDY ON FACTORS INFLUENCING INDIVIDUAL INVESTOR BEHAVIOUR” is based on my own research work and my indebtedness to other work/publications has been acknowledged at the relevant places. This study has not been submitted elsewhere either wholly or in part for award of any degree. Ashvi Mittal B.Com(H) Section-E 12BC136 2 DECLARATION BY TEACHER INCHARGE This is to certify that the project titled “A STUDY ON FACTORS INFLUENCING INDIVIDUAL INVESTOR BEHAVIOUR” done by Ashvi Mittal is a part of her academic curriculum for the degree of B.Com(H). It has no commercial implication and is done only for academic purpose. Mrs Aruna Jha Miss Ankita Tomar (Teacher in- charge’s name and signature) signature) 3 (Mentor’s name and Signature) ACKNOWLEDGEMENT I feel great pleasure in expressing my gratitude to my mentor Miss Ankita Tomar of Commerce Department, Shri Ram College of...
Words: 6505 - Pages: 27
...INVESTMENT ANALYSIS Table of Contents 1.0. Introduction: 3 3.0. Advantages of frequency distribution: 3 4.0. Analysis of returns of Reliance industries limited 4 3.1 Analysis of return of ONGC: 5 3.2 Analysis of return of Bharti Airtel: 6 4. Measurement of central tendency: 6 4.1 Mode: 7 4.2 Median: 7 4.3 Mean 7 5. Conclusion: 8 REFERENCES 10 1.0. Introduction: Generally shares are issued in the primary market and new issued shares are traded in the secondary market. BSE and NSE are two renowned stock exchanges which plays an important role in Indian stock market. Most of the big companies in India are listed in these stock exchanges. The companies are enlisted with these stock exchanges as per rules and regulation specified by particular stock exchanges (Greer and Kolbe, 2008). In Indian context the company distributes the shares in lieu of capital with the help of these stock exchanges. It is an essential pillar of private sector companies. Mallin and Ow–Yong (2009) commented that capital formation is the main function of stock exchanges. Beside the main function stock exchanges in India do lots of work. It provides a place where all the securities are traded. Security market provides a linkage between saving sector and corporate sector. Stock market generally provides the all the information about price and trading of the securities altogether. The author selects three big companies i.e. Reliance industries ltd, ONGC, Bharti Airtel Ltd, to compare...
Words: 2176 - Pages: 9
...Project Number: DZT0517 Stock Market Trading An Interactive Qualifying Project Report Submitted to the faculty of the Worcester Polytechnic Institute in partial fulfillment of the requirements for the Degree of Bachelor of Science by ___________________________________________ Meng-Yu Ni Date: August 2006 Approved by: __________________________ Professor Dalin Tang Project Advisor 1 Abstract Using the information from the internet and published books, a general understanding about stock market and trading strategies was obtained. The knowledge and trading strategies were applied in the market in a stock market simulation to get real-time trading experience. Experiences learned from using trading methods in this simulation will help me to become a better investor in the future. 2 Acknowledgement First, I want to thank my parents who gave me the opportunity to study at Worcester Polytechnic Institute in USA. Second, I would like to thank my advisor, Dalin Tang, who gave me advices, and help me during this whole project time. Thirdly, I want to thank Worcester Polytechnic Institute for giving me opportunity to do this project, which made me to learn more things from outside of classes by myself. Finally, I would like to thank all the people who gave me some help when I needed it. 3 Table of contents Abstract ........................................................................................................................... 2 Acknowledgement...
Words: 8065 - Pages: 33
...outperformed the Standard & Poor’s stock index from 1991 to 2005. I used the S & P 500 Index benchmark to make that assessment. Mutual Fund investment performance or Annual total return can be measured as the increase or decrease in net asset value plus the fund’s income distributions. Net asset value is computed as the fund’s total assets less liabilities, divided by the number of mutual fund shares outstanding. Another way to measure investment performance is to use the internal rate of return (IRR). This gives you the periodic rate of return at which your invested dollars produce the investment results you see at the end of the period. Good performance means that the investment would have to provide returns necessary to meet an individual’s goals. Mutual Funds investments don’t have to beat a specific benchmark to be successful. Bill Miller was able to make consistent abnormal trading profits which would explain the fund’s performance. Mutual funds are also likely to outperform the S & P Index when small firms outperform large ones and underperform when small firms experience worse. Miller’s investment strategy explains his good performance to a small extent but most of his success in beating the market was luck and market timing. His portfolio is diversified compared to an individual stock portfolio. He buys and holds stocks with a turnover rate of 9% compared to a typical fund’s turnover rate of 85%. He usually holds on to winning stocks unless he decides to buy new names...
Words: 1003 - Pages: 5
...Finance & Banking, vol.1, no.3, 2011, 125-138 ISSN: 1792-6580 (print version), 1792-6599 (online) International Scientific Press, 2011 Stock Market Analysis in Practice: Is It Technical or Fundamental? Gil Cohen1, Andrey Kudryavtsev2 and Shlomit Hon-Snir3 Abstract Investors use varies tools in the investment process. Some use technical or fundamental analysis, or both in that process. The aim of the following survey research is first, to examine differences between professional portfolio managers to amateur investors in their approach towards technical and fundamental analysis. Second, we want to study the difference of use of fundamental and technical tools in the buying versus selling stocks. We used online survey in one of the leading business portals in addition to asking professional investors in a leading investment house in Israel. Our results show no significant difference between professional and non-professional investors in terms of how frequently they use fundamental and technical investment tools. Both groups of investors use more frequently fundamental tools than technical when they make buy/sell decisions. We also found that non-professional investors use more fundamental tools such as "analysts' recommendations" when they buy stocks and more technical tools such as "support and resistance lines" when they sell stocks. Moreover, our study Economics and Management Department, The Max Stern Academic...
Words: 1882 - Pages: 8
...Investment Principles and Analysis Trinity University FNCE 3352 Spring 2010 INSTRUCTOR: Carl M. Hubbard, Ph.D., CFA Office: CGC N3l6; phone 999-7283, carl.hubbard@trinity.edu OFFICE HOURS: 9:30 – 11:30 MW; 2:30 – 4:00 TTh; Other times available by appointment. TEXTBOOK: Zvi Bodie, Alex Kane, and Alan J. Marcus. Essentials of Investments, 7th Edition. New York: McGraw-Hill, 2008. CALCULATOR: Texas Instruments BAII Plus Calculator COURSE OBJECTIVES The learning objectives for students in this course are: (l) improve your understanding of financial securities and markets, (2) develop the ability to analyze investment companies, common stocks, and bonds for investment decisions, (3) understand how options are valued and how option contracts are used in hedging and speculating, (4) understand how to apply security analysis techniques in relatively efficient capital markets, and (5) gain practical experience in trading securities. The prerequisite for this course is the completion of FNCE 3301 with a grade of C- or better. REQUIREMENTS OF THE COURSE 1. Complete the assigned readings and problems. 2. Attend and participate in each class meeting. 3. Complete the security analysis project. 4. Complete the three examinations as scheduled. READING AND PROBLEM ASSIGNMENTS The reading and problem assignments are designed to achieve the goals of the course and are to be completed in preparation for the discussion of that...
Words: 1971 - Pages: 8
...Investment Principles and Analysis Trinity University FNCE 3352 Spring 2010 INSTRUCTOR: Carl M. Hubbard, Ph.D., CFA Office: CGC N3l6; phone 999-7283, carl.hubbard@trinity.edu OFFICE HOURS: 9:30 – 11:30 MW; 2:30 – 4:00 TTh; Other times available by appointment. TEXTBOOK: Zvi Bodie, Alex Kane, and Alan J. Marcus. Essentials of Investments, 7th Edition. New York: McGraw-Hill, 2008. CALCULATOR: Texas Instruments BAII Plus Calculator COURSE OBJECTIVES The learning objectives for students in this course are: (l) improve your understanding of financial securities and markets, (2) develop the ability to analyze investment companies, common stocks, and bonds for investment decisions, (3) understand how options are valued and how option contracts are used in hedging and speculating, (4) understand how to apply security analysis techniques in relatively efficient capital markets, and (5) gain practical experience in trading securities. The prerequisite for this course is the completion of FNCE 3301 with a grade of C- or better. REQUIREMENTS OF THE COURSE 1. Complete the assigned readings and problems. 2. Attend and participate in each class meeting. 3. Complete the security analysis project. 4. Complete the three examinations as scheduled. READING AND PROBLEM ASSIGNMENTS The reading and problem assignments are designed to achieve the goals of the course and are to be completed in preparation...
Words: 1970 - Pages: 8
...for any manager in the mutual-fund industry. By the middle of 2005, Value Trust is worth $11.2-billion. Bill Miller’s approach to investment management was research-intensive and highly concentrated. For instance, nearly 50 percent of Value Trust’s assets were invested in just 10 large-capitalization companies. While most of Bill Miller’s investments were value stocks, he was not averse to taking large positions in the stocks of growth companies. In other words, Bill Miller’s investing style is iconoclastic: “You simply can’t do what he’s done in the supremely competitive, ultra-efficient world of stock picking by following the pack…The fact is that Miller has spent decades studying freethinking overachievers, and along the way he’s become one himself.” Mutual Funds Definition A mutual fund is an investment vehicle that pooled the funds of individual investors to buy a portfolio of securities, stocks, bonds, and money-market instruments to meet specific investment objectives; investors owned a pro rata share of the overall investment portfolio (Bruner, 2007). The various investments included in a fund’s portfolio are handled by professional money managers in line with the stated investment policy of the fund. All mutual funds have a portfolio manager, or investment advisor, who directs the fund’s investments according to explicit investment objectives. Mutual Fund Types Investors have different objectives, so various types of mutual funds are needed to help them achieve...
Words: 1805 - Pages: 8
...Personal Investment Project Student’s Name Institutional Affiliation 25th June 2016 Introduction When creating an investment policy statement, the first step is to consider an investor’s objectives, preferences, and constraints in investing. One should quantify and specify their investment needs and hence seek out those investments which meet these criteria. My personal investment strategy is based on the analysis of the company’s fundamentals and the macroeconomic environment in which it operates. As such, I invest in historically steady companies in less volatile industries. This strategy may be considered as fundamental investing. For this reason, I desire to invest in a company that has a proven track record of strong financial performance and operates in an industry that is not overly disruptive. For this project, I will elaborate this investment strategy with reference to the Coca-Cola Company, which is one of the companies I am interested in investing in. Coca-Cola (KO) is a well-known brand in the world, consistently ranked as the most valuable brand in the world by Forbes Magazine. Statement of Strategy and Investor Style In my investment strategy, the most important factors I consider are the company’s earnings performance, dividend payout, value of stock and the company’s market leadership in the industry it operates. Earnings Performance I also analyze the company’s earnings per share (EPS) to measure the profitability per unit of equity. High EPS means...
Words: 1232 - Pages: 5
...Macro-Economic Variables on the Stock Market Impact of Macro-Economic Variables on the Stock Market Arunabha Dhar (Roll No. 008) Gaurav Bhatt (Roll No. 017) Amartya Ray (Roll No. 067) Bodhisatva Basu (Roll No. 075) Rahul Jain (Roll No. 094) Arunabha Dhar (Roll No. 008) Gaurav Bhatt (Roll No. 017) Amartya Ray (Roll No. 067) Bodhisatva Basu (Roll No. 075) Rahul Jain (Roll No. 094) Contents UNDERSTANDING ON RESEARCH PROBLEM IDENTIFICATION & DEFINITION 3 ABSTRACT 3 INTRODUCTION 3 LITERATURE REVIEW 6 GAP in Research 8 MOTIVATION 8 DATA COLLECTION/SAMPLE SELECTION 9 HYPOTHESIS 10 Research Methodology 10 FINDINGS 11 CONTRIBUTION TO LITERATURE 23 CONCLUSIONS 23 References 25 UNDERSTANDING ON RESEARCH PROBLEM IDENTIFICATION & DEFINITION Relationship between macroeconomic variables and broad market index: A causal relationship between Nifty CNX and macroeconomic variables in India ABSTRACT The relationship between macroeconomic variables and broad market index by now are well documented in the literature. However a void in the literature relates to examining the causal relationship between Nifty CNX and macroeconomic variables such as FDI, FPI, weighted average lending rate (WALR), GDP and oil import in India and correlation among the macro variables. INTRODUCTION Globalization of Indian economy post liberalization has been spurred by capital and stock investment in terms of FDI & FPI. Indian stock market both securities and commodities...
Words: 6806 - Pages: 28
...1 March, 2013 The Fundamental Analysis: An Overview Sónia R. Bentes#, Raúl Navas* ISCAL, Av. Miguel Bombarda 20, 1069-035 Lisbon, Portugal smbentes@iscal.ipl.pt * COPORGEST, SA, Av. da Liberdade 245, 9º C 1250-143Lisbon, Portugal rdnavas@gmail.com Abstract - In this paper we discuss the fundamental analysis by covering a number of studies in this field of research. This constitutes a useful tool to evaluate the companies’ financial performance. Particularly, the discussion in this paper illustrates how this kind of approach can help in analyzing a companies’ stock price. Additionally, a debate on its potentialities is also provided. Keywords – Fundamental Analysis, Return on Equity, Return on Investment, Price Earnings Ratio, Price to Book Value # foreign competition in a particular sector in order to identify the best company of the sector. ii) Bottom-up approach: in this method, the analyst starts the searching analysis within a specific sector irrespective of its industry/region. The fundamental analysis is carried out with the aim of predicting company’s future performance. It is based on the belief that the market price of an asset tends to move towards its “real value” or its “intrinsic value”. Thus, if the intrinsic value of an asset is higher than its market value, there may be a situation where it is time to buy. Otherwise, investors should sell. In the next section, the theoretical framework of the fundamental analysis is reviewed. The paper ends with a...
Words: 2849 - Pages: 12
