Week 5 FINAL DUE APR 8th.

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Investment Analysis

Kevin Sessions

University of Arizona Global Campus

BUS 405 Principles of Investments

Mark Stricklett

Mar 20, 2023

Investment Analysis

If I won $100,000 in a lottery, I would be excited at the opportunity to invest it wisely and grow my wealth over time. However, my current financial situation could be more pleasing, and I have a substantial debt that I need to pay off. I am struggling to maintain the interest payments on the debt. My income potential is high and my work stability is certain, long-term financial planning is challenging due to my lack of dollar for dollar accountability utilizing a zero based budget.

In terms of current investments, I do not have any significant investments aside from a traditional 401k and some savings that I accumulated over the past 23 years. A lottery win would provide me with a substantial windfall, and I would like to invest it prudently to help protect my financial future. Considering my current financial status, my top two investing priorities would be to pay off my mortgage and save more for retirement. My mortgage is close to $340,000, so it's a sizable burden that I want to pay off as quickly as possible. The interest I pay on my mortgage would be lowered, and long-term savings would be realized if I used any of my lotto winnings toward paying it off.

In addition, I would like to save more for retirement, as I am only contributing five percent towards a retirement plan, and my future is fairly-certain regarding employment. When the time comes for retirement, I can rest easy knowing I have enough money for my needs. Real estate is one type of investment that I consider as part of my investment plan. Real estate investment has a long history of popularity due to its potential for reliable returns and sustained growth (Waldron, 2018). As someone in my financial condition, I know firsthand the importance of having a stable feeling of security, which can be provided by owning property.

Real estate is a significant investment decision for many reasons. First, it has the potential to bring in a regular stream of cash through rent. Real estate also has a history of steady price increases that can add up to substantial profits over time. Furthermore, real estate ownership can positively impact my tax return through deductions for mortgage interest and property taxes.

In terms of stocks, I would consider investing in, Apple, Amazon, PayPal Holdings, Diageo plc, and EOG Resources Inc. These corporations have proven records of success and are leaders in their respective fields.

Apple Inc. is a multi-trillion-dollar company, making it one of the most valuable companies in the world. The company is well-known in the market for its long tradition of innovation and commitment to producing only the highest quality goods. In addition to a healthy cash flow, the company's balance sheet boasts over $200 billion in reserves.

Amazon is another digital giant that has expanded rapidly in recent times. Its market valuation is almost $1.5 trillion, and the corporation has expanded into many other industries, from e-commerce to cloud computing. In addition, the firm has shown remarkable financial performance, growing its revenues by more than 20% annually on average.

PayPal Holdings is a leading online payment service provider with over $300 billion in market capitalization. The company has shown remarkable financial performance over the years, with annual sales growth of over 20% (ZXhang et al., 2023). Nevertheless, the firm's financial sheet is robust, with over $14 billion in cash reserves.

Diageo plc is a leading producer of alcohol and has a market capitalization of over $110 billion. Guinness, Johnnie Walker, and Smirnoff are just a few well-known brands the corporation owns. The firm has also shown consistent success, with annual sales growth above 5%.

EOG Resources Inc. is an oil production company with over $50 billion in market capitalization. The corporation owns shale oil and gas deposits, among other assets, and has regularly shown strong financial performance. The firm has a proven history of dividend payments, now at a yield of around 2%.

I chose these specific stocks based on available data and company information. These companies have proven reliable throughout time by producing consistently solid financial outcomes. In addition to being at the forefront of their fields, each of these businesses has a significant edge over its rivals.

Furthermore, these stocks have a promising future, with a significant opportunity for growth in their respective industries. Apple Inc. stands to gain from the rising need for wearable technology and the ever-expanding smartphone market. Both Amazon and PayPal Holdings stand to gain from the expansion of online shopping, but Amazon stands to gain more from the change to digital payment methods (Bhandary, 2019). Diageo plc is set to benefit from the intensified demand for premium alcoholics and the increasing popularity of craft beer. EOG Resources Inc. is also set up to profit from the rising demand for oil and gas, especially in developing economies.

Overall, my choices of investment align with my financial goals. Real estate is an excellent way to diversify my portfolio since it offers the possibility of both stable income and long-term gain. To add to the benefits of diversifying my portfolio and lowering my risk, I can make high returns by purchasing these stocks. By paying off my mortgage and saving for retirement, I can ensure that I am on track to achieving my financial goals and securing my future.

According to Smart, S., & Zutter, C. J. (2020)."REITs typically offer investors some income in addition to their appreciation potential." With my future in mind, the accumulation and interest of real estate investment trust (REIT) sound exciting.

References

Bhandary, B. (2019). Amazon Pay: Banking on new thinking diagnosis white paper.  Available at SSRN 3413354.

Smart, S., & Zutter, C. J. (2020). Fundamentals of investing (14th ed.). Retrieved from https://platform.virdocs.com.

Waldron, R. (2018). Capitalizing on the State: The political economy of real estate investment trusts and the ‘resolution’ of the crisis.  Geoforum,  90, 206-218.

ZXhang, Y. X., Haxo, Y. M., & Mat, Y. X. (2023).  PYPL PayPal Holdings Inc. Common Stock (No. Stock Analysis). AC Investment Research.