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Part Two (6pts) - Initial Investment Strategy

Submit a 1-2 page, single spaced paper about your initial strategy for investing a second portfolio of $500,000 in the Stock and Option Challenge. You are not allowed to use any mutual funds or ETFs in this second challenge. You may use any stock that is available to trade in the Stock Trak system. You may also use options strategies, but you are not required to do so. Your paper should discuss which specific investments you intend to purchase and why you chose this particular basket of stocks and/or options. Submit your completed paper to the appropriate folder in Canvas.

Required Formatting:

Your document should be in Times New Roman, 12 point font with 1-inch margins. Type your name and the assignment’s name in the Header (“Insert” tab, then select “Header” in MS Word). Do not include a heading in the body of your text to fill space…I will remove it when determining the length requirement. You may use 1 image (google “snipping tool” if you do not know how to use it), but it needs to be no larger than 3 inches by 3 inches.

Initial Investment Strategy

An investment with the BBOX Company would be the most ideal for the long term profits. To start with the company has experienced a profit of 2.12% percent in the previous year. This shows that it has valuable products or services which have a significant client base. The price of each share is currently at 14.15 while the last price was at 14.45. Although this shows a profit, it is low and significant returns are only be experienced in the event of many shares or long periods of investment times. The available shares from this company are 800 which will cost 11,560 in total. Buying all these shares will still leave a balance of 488440.

The price of the TSLA shares shows that it is considered a prime investment in the market. Companies with such prices for their shares are mostly innovative companies that have important patented technologies that are revolutionary in the particular business or industry. For this reason, the stock costs are high such that there are only a few numbers of stakeholders. The advantage of such companies is that it is easy to make decisions that matter in the market. However, the fact they recorded a loss in the previous year shows that the company might be at an interesting point of its lifecycle. The loss could be as a result of practices such as unsuccessful research and development effects or the like. This means that the company is not yet very established and they might be a risky investment. It would be best to wait before making this investment seeing how big it is.

FCX is another significant investment. The reason why it is important is because it depends on a large number of stockholders. The main advantage with this is the spread of risk. Due to the many investors, losses are not as damaging as they are in the case of little investors and high stock prices. However, the shortcoming with such a company is that the dividends are also divided among a large number of stakeholders. For this reason, the only possibility of making profit is to buy a large number of shares. However, this should only happen if the profits the company is standing to make is more than the 0.09% per year whose profit will be insignificant compared to the invested amount.

Among the most useless investments made is that of the ITI shares. Not only are the prices of the shares low but their number is also too little to make sense. At a price of $2.59 per share the complete value of the share is 1,992 which mean 800 shares. What is more, the company is experiencing a loss which seems to have been happening for some time. However, the investments made in the company are not significant enough to make their loss a significant event in the portfolio. Similarly, unless a miraculous increase in stock price happens, any profits being experienced might not be very significant. Despite the possibility of making a profit in this organization, it would be more worthwhile to find a better investment opportunity.

HOT is a company to watch out for because of the high stock per price and the modest profit that was recorded. If the company was in a losing streak the differences of their price would have dropped significantly since everybody would be running to save the most of their investments. However, a steady flow might indicate investments in fields such as equipment and land to further spread their product or services and with them boost the company’s revenue.

Part Three (8pts) - Mid-Project Debrief

Submit a  1-2 page, single spaced  self-assessment of how your strategy has been working and what, if any, changes you plan to make or have already made. I am looking for you to tell me what specifically you have learned so far on this assignment. Submit your paper to the appropriate folder in Canvas before the due date.

Required Formatting:

Your document should be in Times New Roman, 12 point font with 1-inch margins. Type your name and the assignment’s name in the Header (“Insert” tab, then select “Header” in MS Word). Do not include a heading in the body of your text to fill space…I will remove it when determining the length requirement. You may use 1 image (google “snipping tool” if you do not know how to use it), but it needs to be no larger than 3 inches by 3 inches.