Investment Journal 1 Sample Assignment

Investment Journal 1

As an investor, relatively new to the markets, my personal investment goals for the Stocktrak trading exercise comprised of a combination of profit maximization and risk minimization strategy, wherein I aimed at maximizing the overall return of my portfolio. The initial exercise required that a choice is made regarding the initial investments to be made for five equities. For which the research conducted has been listed in Appendix 1, as a list of the newspaper articles accessed. The initial portfolio composition partaken at the onset of the trading period can be deciphered from the Appendix 2, which presents the initial trades and the relative weights assigned to them in the portfolio. Of the five companies chosen, Lynas Corporation held the highest weight (38.46%), followed by the Star Entertainment Group (23.07%), Corporate Travel Management and Bellamy’s Australia carried equal weights (15.38%), while the AVEO Group trailed behind (7.692%). The overall market value for this portfolio has been estimated at $ 11,711.00 which reflects the valuation of the securities at their current market prices.

In order to expand the basis for the portfolio and for fulfilling the underlying objective of profit maximization, the investment strategy in the following week included a combination of margin trades and short sales to be made. Both the categories of the trades were made based on the information relayed in news, following the predictions for positive future returns. The performance of the margin trades made has been reflected in the table in Appendix 3, which reflects that the decision pertaining to the margin trading turned out to be a rather imprudent one as the trades all closed at a loss (loss accumulating to $ 71). Similar was the case observed in the case of short sales conducted in the portfolio, depicted in Appendix 4, wherein the prices of the shares all up-surged, causing the entire move to be rather unfruitful and an estimated loss to be $ 69.

Appendix 1

Week 2 News Articles

Aveo Group:

Bellamy's Australia Ltd

Corporate Travel Management Ltd

Lynas Corporation Ltd (Limit)

The Star Entertainment Group Ltd (Limit)

Week 3 News Articles

Chemical Industry-Wesfarmers Ltd.

Healthcare Industry- CSL FPO

Property Retail Industry- REA Ltd.

Macroeconomic News

Appendix 2

Table 1 Initial Trades

Investment Journal img1

Appendix 3

Table 2 Margin Trades

Investment Journal img2

Appendix 4

Investment Journal img3

Table 3 Short Sales