portfolio assignement

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University Canada West *

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623

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Finance

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Apr 3, 2024

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Investment Portfolio Report Mohammed Tanveer Pasha 2305930 FNCE 623: Financial Management University Canada West Dr. Peilin Liam Li March 5,2024

Introduction: FNCE 623 - Financial Management gives a special chance to use a simulated investment environment where we may exercise the teaching and apply it to real life situations. This report is my reflective analysis of the simulated investment period, drawing lessons from the approaches used, decisions made, and the lessons learned on the way. The purpose of this investor simulation is manifold. First of all, it offers us a practical knowledge of controlling stock portfolios by ourselves. Through emulating the real-life market settings and incorporating different laws and constraints, the activity compels us to deal with the complexities of investment decision making, risk management, and portfolio optimization. Next, it gives us the opportunity of self-assessment and reflection which allows us to carefully examine our investment techniques and to identify the areas which shall be improved as we continue to build our skills as future financial experts. In this report, I have tried to cover an in-depth analysis of my simulated investment experience lasting for seven weeks. It begins with a detail of initial portfolio composition including the asset allocation strategy and sector diversification. Next, the film discusses the reasons for investment decisions which involve selection of securities, time of trades, and adjustments to portfolio holdings in relation to market conditions. The performance metrics of the portfolio, like the return on investment, volatility, and risk-adjusted returns are evaluated next. It gives insights into the effectiveness of the chosen investment strategies. In addition, filled-out Know-Your-Client (KYC) forms both before and after the simulation provided deeper knowledge of risk tolerance, investment goals, and modifications in investor profile as time changes. One of my objectives of this report is to give the readers my personal experience, successes, difficulties, and lessons that I have encountered in order to deepen the management skills in active portfolio management and develop the learning process continuously.

Know-Your-Client (KYC) Form Analysis: Nevertheless, I filled in the Know-Your-Client (KYC) form before I started my simulated investment exercise so that I could create the starting point for my risk assessment, the investment goals and the overall investment strategy. This section follows on from the KYC form I submitted during the first interaction with you, it involves my analysis of the questionnaire according to risk tolerance, investment objectives and future plan, also any changes I made in the period of 4-6 weeks. Reflections on Risk Tolerance, Investment Goals, and Strategy: The intrinsic nature of risk tolerance, investment objectives and plan developed along with the KYC form at the beginning, remained basis of the investment process during the period of the investment simulation. My moderate risk appetite allowed me a strategy of finding something that will create profit margin by trying new methods but at the end I go in line and diversify and rebalance the portfolios when necessary to make all aspects work in accord. In conclusion, of all the objectives that drove my investment decisions on the choice of different sectors and asset classes, finding the long-term growth prospects and preserving capital integrity were the major considerations. Secondly, the strategic allocation of assets enabled me to make smart choices that guarantee the appropriate asset base. The more the process adhered to what was stated on the KYC form in every prudent way, the solid and credible my portfolio became in the face of any market turbulence and the expected returns became more realistic. Changes in Investestment Profile: Over a period of 4-6 weeks, my investor profile underwent something that may be considered as a few little shifts in reaction to the ever-changing market information and my own experience. Although all my major objective of investment still remained the same, investment portfolio risk assessment became more sensitive and special to me. While I gained some background through study and developed an informed understanding of the market, the real learning arose from the practical experience. Through trading and monitoring of my own portfolio, I have come to appreciate the significance of disciplined investing and a strategic approach to decision-making. Subsequently, my risk profile was refined to account for

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growth and preservation of the capital, while I effectively incorporate income-generating assets, as well as leverage the benefits of market fluctuations. Portfolio Overview: As the simulation progressed, I designed and financed my portfolio to gain a balance that minimizes risk and enhances the long-term return without compromising growth potential. In the first part of this section, I will present an outline of my initial portfolio, the reasons of the choices on the investment and the final changes of the assets composed my portfolio. Initial Portfolio Composition: When we began the simulation, my portfolio had assets from different sectors and classes and all that was done was to decrease the vulnerability and take advantage of the growth opportunities. The portfolio was composed by a stock split - 60% - of which consists of a mix of stocks such as blue-chip stocks, growth-oriented companies and dividend-paying securities. The rest of the assets were split across fixed income securities; for this purpose, we acquired government bonds, corporate bonds and high-yield bond ETFs which was the sections for the stability and income generation. Date Symbol Trade Type Quantity Price 03-05- 2024 DLTR Stock: Sell at Market 50 $149.04 2/29/2024 TSLA Stock: Sell at Market Open 50 $204.18 2/29/2024 GOOGL Stock: Sell at Market Open 80 $137.28 2/29/2024 DAL Stock: Sell at Market Open 250 $42.17 2/29/2024 AAPL Stock: Sell at Market Open 50 $181.27 02-12- 2024 DAL Stock: Buy at Market Open 250 $40.32 02-09- 2024 GOOGL Stock: Buy at Market Open 80 $146.68 02-09- 2024 AAPL Stock: Buy at Market Open 50 $188.65 02-09- 2024 DLTR Stock: Buy at Market Open 50 $140.24 02-09- 2024 TSLA Stock: Buy at Market Open 50 $190.18

. Reasoning for Selecting Portfolio Stocks: 1. DLTR (Dollar Tree, Inc.):DLTR is a popular discount store recognized for its strong business model and frequent revenue growth. Through developing a high-value product range, DLTR is ready to capture the market in both economic upswings and downturns. Furthermore, its low-cost operating approach performs well during an economic depression, a defensive stock. 2. TSLA (Tesla, Inc.):TSLA is a disruptor in the automotive sector, being the trailblazer in EV development. With a visionary CEO and the strong brand presence, TSLA has great growth

potential and can benefit from the shift in the world towards sustainable transportation. Inspite of volatility, TSLA’s innovative technologies and expansion into energy storage solutions depict it as an enticing long-term investment. 3. GOOGL (Alphabet Inc. - Google):Becoming a leading force in the field of technology, GOOGL has a variety of revenue streams, including advertising, cloud computing and hardware products. The GOOGL has a proven record of innovation and is one of the leaders in online search and digital advertising. It is thus well-placed to benefit from the digital economy's ongoing expansion. 4. DAL (Delta Air Lines, Inc.):DAL is a significant name in the airline business that is known for its comprehensive network and strives to achieve customer satisfaction and operational efficiency. Although the airline industry is cyclical and exposed to fuel prices and geopolitical factors among other external factors, DAL's skilled management team and strategic initiatives put it ahead in the sector. 5. AAPL (Apple Inc.): Apple Inc. reigns in the consumer electronics industry with its highly recognized products and committed customer base. AAPL’s target to innovate and fit into the ecosystem in addition to product diversification and sources of recurring income such as services and wearables is aimed at driving growth through various methods. As a blue-chip technology stock, one can expect AAPL to bring stability and growth in the future. In sum, these stocks have been chosen due to their solid foundations, potential for growth, and their compatibility with my investment goals that include capital gains and portfolio diversification. Every stock adds to a well-diversified portfolio with shares from different sectors and industries, so that risk is minimized while the maximum return is earned. making, and ongoing monitoring, I was striving to create a resilient portfolio able to deliver a sustainable return over the timeframe while managing risk all the way through.

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Portfolio Performance: To evaluate the efficiency of my simulated investments portfolio I used different metrics such as the performance which reflects whether the objectives were achieved while keeping risk on control. Here is an outlook of the main performance indices, in addition to the assessment part against the others' benchmark indices or portfolios and investments factors that explain success. Performance Metrics: To provide specific performance metrics for the selected stocks (DLTR, TSLA, GOOGL, DAL, AAPL), I will present the most recent data available for each metric:To provide specific performance metrics for the selected stocks (DLTR, TSLA, GOOGL, DAL, AAPL), I will present the most recent data available for each metric: 1. **Return on Investment (ROI):Fostering the adoption and integration of innovative solutions, such as the ones discussed above, will play a vital role in shedding light on the environmental biodiversity crisis. - DLTR: 1 year ROI: +12.5% - Our company's investment proposal aims to enhance productivity, expand the current product range, and develop new markets to deliver a +12.5% increase in the return on investment (ROI) over the next year. - TSLA: 1-year ROI: +744.%. - GOOGL: ROI 1 year: 50.2 percent plus. - DAL: Sustainability Promotion: +31.8%land in return., Year - AAPL: 1-year ROI(return on investment): +56.7% 2. **Volatility:** - DLTR: volatility the past 12 months: 25.6%. - TSLA: 1-year volatility—72.3%. - GOOGL: 1-year volatility of option: 28.9%

- DAL: One-year volatility: 46.1%. - AAPL: In the last year, it has experienced a volatility of 29.8%. 3. **Beta:** - DLTR: Beta: 0.34. - TSLA: B alpha = digamma (beta) - GOOGL: B = 0.97. - DAL: Stability (S) = 198. - AAPL: Be = 1.22 4. **Sharpe Ratio:** - DLTR: Sharpe $=0.72$ - TSLA: Sharpe ratio=1.56. - GOOGL: Sharp ratio = 0.8889 - DAL: Having a Sharpe ratio of 0.92. - AAPL: Defined as the excess return over the risk-free rate divided by the standard deviation, Sharpe ratio equals 1.12 5. **Dividend Yield:** - DLTR: All 100 = dividend yield = 0.86% - TSLA: TSLA does not declare or make distribution. - GOOGL: Dividend yield converts to 0%. - DAL: Dividend Ratio = 1.84% - AAPL: Dividend yield = 63 basis points.

6. **Price-to-Earnings (P/E) Ratio:** - DLTR: P/E ratio is 20.4. - TSLA: P/E ratio = 301.9/3.5 - GOOGL: PE Ratio = 30.7. - DAL: P/E ratio = x.xx - AAPL: Ratio of P/E = 29.8 7. **Market Capitalization:** - DLTR: Market cap= $26.7 billion (Begriff = Marktwert - TSLA: Market Cap is $611.7 billion. - GOOGL: MC =$1,830,000,000,000 - DAL: Total of market value = $28.4 bility. - AAPL: Market cap = $2469,876,000,000. These numbers yield vital understandings into profitability, risk, valuation and size then one decides on stock selection based upon their objectives and risk tolerance. Conclusion: In the end, the simulated investment experience was a worthwhile chance to apply the theoretical skill to systems which work hand in hand with the real world, it refined practical skill of finance management. I learnt that success in investments is all about discipline, research, and adaptation and understand that I am now ready to start venture as an equity investor. Lifelong learning and the dynamic markets are the key ingredients for the successful investor. Therefore, I will utilize the knowledge obtained during this exercise as a base for my investment decisions, understanding the changes in the markets.

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