Finance 367 Stock Trak Paper

3145 Words Jan 12th, 2011 13 Pages
Stock-Trak Portfolio Analysis Portfolio management is a tactic used by not only those in the financial sector of the business world, but also by individual’s managing their own personal finances. Therefore, it important to develop and implement investment strategies in order to gain the most on a portfolio – be it as a mutual fund manager or an individual planning for retirement. Tools such as Stock-Trak, an online portfolio simulation, allow students to gain hands on experience testing different investment strategies in a risk-free, yet realistic environment. From February 1 to April 30, 2010 I took part in one such simulation by managing an online Stock-Trak portfolio. After being given $1,000,000 with which to invest, all monetary …show more content…
In the end, these stocks were the ones which resulted in the largest combined percentage of losses. In particular, the growth stock MON had the highest percentage loss of 17.02% and a monetary loss of $4,525.50. If I were to redo my portfolio I would have made sure to use derivatives to hedge losses on such stocks. As it were, when I noticed the stock prices declining, I did not act accordingly, rather hoped that eventually the prices would rise again. To minimize my losses, I should have put protective puts on the stocks or sold them sooner. Alternatively, I could have implemented the strategy of buying a call option on many of the stocks I purchased. Had the value of the stock risen beyond the strike price, I would have gained from the purchase. Had the stock price fallen, as it did, I would have only lost the premium on the option. Another strategy I used to purchase stocks was to review analysts’ predictions on companies’ quarterly reports. Two companies I selected as a result of anticipated favorable reports with high EPS included UA (Under Armour Inc.) and JNJ (Johnson & Johnson). UA proved to be my best investment as it resulted in a total percentage gain of 38.15%, or an added value of $1,864 to my portfolio. The surge in UA’s price occurred after the company’s Q1 report announced, among other strong figures, that Under Armour successfully increased its Net Income as a percentage of sales by 1% from the

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