Essay about What Is Your Team 's Investment Strategy And Why?
What is your team 's investment strategy and why? The current investment strategy of our portfolio has been to invest 10-30% overseas, keeping core holdings in the United States, focusing the low P/e (price to earning) ratios, betas, and consistent growth.
Overseas- Investing overseas create for a diversification and uncorrelated assets, mitigating risk.
Core stock in the US- Having core holdings makes for easy monitoring and re-balance if necessary. Reducing volatility, limiting negative trading commissions and any effects or taxes.
Low P/e- We look to see a low price to earning ratios (P/e), it values the company 's current share price relative to its per-share earnings. A low P/e can indicate two things such as the company being undervalued and/or they are doing exceptionally well relative to past trends. The reason we don’t want a high P/e is it stipulates that investors are expecting to higher growth earnings, and to compensate for that, the stock price would need to drop.
Dividends- Dividends are cash payments, drawn from earnings, paid to investors. Companies that are more established and financially stable are more likely to offer dividends (Excluding “fast growers” who are retaining their cash to fund growth). Basically, it is a company 's net profit that is allocated to shareholders.
On the other hand, we recommend taking a look ex-dividends as well. This is when a stock price is brought down in compensation for the dividend amount, from which the…