The Lesson From Investment Management

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02 Nov 2017

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Portfolio Construction and Performance

By

Nguyen Duc Tung

CMU Student ID: 20036306

Institution: EAST ASIA Institute of Management, Singapore

EASB Student ID: 0907005419

Lecturer: Mr. Terence Liew

Submission date: 16th April, 2013

Table of content

Page

I.

Introduction..................................................................................................

3

II.

My portfolio of ten stocks............................................................................

3

III.

The lesson from Investment Management...................................................

4

IV.

Compare with our group portfolio..............................................................

5

V.

Suggestion and Rejection…………………………………………………

6

VI.

Conclusion and recommendation................................................................

6

I. Introduction

The stock market is a market where is people can purchase transactions, transfer, exchange of stock for the purpose of profit-seeking. The Singapore stock market started 1999 with changes from the Singapore Stock Exchange was born. Until now, the story is lost in this market has become a hot topic, the media and public opinion. Many people get high profit and loss after one night. There are many reasons for this phenomenon, and one of them is the investment strategy.

This report will show you an example for investment that a Fund Managerwishes to invest his cash of one hundred million Singapore dollars in Singapore financial market. The objective of financial planners is to buy diversified securities in order to gain maximum profitability

II. My portfolio of ten stocks

The reason I Initial portfolio against group because I think my stocks will get more profit then group stocks. Buy on cheap and high growth potential of stock with high growth potential in the future. High price stock were high also means high risk so therefore I choose stock prices were low, but certainly more. This portfolio will start from 12 March to 8 April 2013. This portfolio will include different industries, which are hotel, service, commercial, multi industry, construction, telecommunication, finance, commercial, communication, and hotel. By calculating ten stocks, finally result I got 101,038,912 from investment ten stocks.

Table 1. Profit and Loss were being observed in four weeks (Individual Portfolio)

Profit over 4 weeks

III. The lesson from Investment Management

On the stock market, many investors buy stocks derived from the tips told by friends, from the phone call from the broker or the one proposed by certain analysts. Also, they buy stocks when the market is in hot stage and until the market froze, they start panic selling of shares held to account then suffered a loss. It's a typical story of mistakes in investment securities. Investment is always efficient method for large profits. However, the stock market is also a very high-risk container. If there is no "sanity" is only a reasonable small mistake can make you "white" hands after one market trade. This is the reasons why investor loss profit in stock market.

1. Buying and holding stock in a long time, the stock price will rise.

Buying and holding stocks is a correct strategy, but do not do it blindly. Stocks often rise over time, but that's not always true. But actually never have any stock rise in a long time. Lessons learned from this mistake, you have to analyze whether the time is right time to sell the stock. Determining the best time to sell stocks is considered to be quite difficult for investors. There are some signs to help investors in the stock market can recognize this point: There are some point to help investors in the stock market can recognize this point: there is a major change in management companies, companies suddenly cut dividends or decrease in revenue enter, when you feel the market price has surpassed intrinsic value, or if not satisfied with the current portfolio

2. Emotional investment

A lot of investors prefer buy shares of a company because they like the product or the company. Or they buy stock from the company they know. There is the best place to invest is stocks of those companies that companies just appeared on the market. You may not know much about the "new companies" but you absolutely can and should also know about them if you have to spend time find out more about the companies you want to invest. Lessons learned from this mistake is invester perform stock analysis seriously. That can help you save a lot of money.

3. Investment in rumors, tips

Many investors prefer to buy stocks by type of rumors, tips, and advice of its advisory services. It’s mean, the investor prefers to invest follow by the rumors and most of rumors are incorrect. Most investors do not have access to the sources of information and consultancy services possible. But even with good advice, they may not be aware of the problem and did not do so. Meanwhile, it is very easy to lose money to listen to the advice of friends or average level broker. Lessons learned from this mistake is investor must have the correct information based on thorough analysis, along with advice from consultants or professional stockbrokers.

4. Buy cheap stock

It was a lucrative rate of 100% can occur. But mistakes that investors make is they ignore the risks inherent in the stock. In many cases, the stock was sell with the cheap price always have reason and the reason is usually negative. Lessons learned from this mistake is the cheap stock not always better than more expensive stocks. Cheap stock is often very attractive but it is the company has been in a position inferior, or something goes wrong in recent times. Also, you usually have to pay extra fees and commissions more when buying cheap stocks and also take more risks because of devalued securities easier than high stock prices. You should buy good stocks on the basis of the analysis at the right price.

5. Hesitation in investment decisions

Some investors find it difficult to decide when they want to buy or sell. They feel certainly because they don’t know what they are doing. Most investors did not observe changes in an objective stock. One of them always analyze by themselves. Lessons learned from this mistake that investors need assertiveness in their investment decisions. This is a very necessary when you participate in the stock market.

IV. Compare with our Group Portfolio

My individual performance was lower profit than the group’s performance. Once the group making $ 111,205,458 profit while my investment make $ 1,038,912 profit. My performance based on choose the certainly companies. I chose well-know and dominate company such as: OCBC, OUB, Singapore Technologies Engineering Ltd …. Besides that, my greatest successful is chose OCBC bank, this bank has gain its share price from $10.30 to $10.63 per share and I earn $651,184. However, I has a small mistake when chosen Keppel Corporation to invest, its share price from $9.56 to $ 9.02 per share as I lose $569,571.

Stock

Market

Value

Profit/Loss

Keppel Corporation

$ 9,430,429

$ (569,571)

OCBC

$ 10,516,066

$ 516,066

SingTel

$ 10,078,992

$ 78,992

OUB

$ 10,651,184

$ 651,184

Soup Restaurant Group Limited 

$ 9,995,000

$ (5,000)

Global Logistic Properties

$ 10,215,478

$ 215,478

Noble Group

$ 10,137,786

$ 137,786

Sky One Holdings

$ 10,258,026

$ 258,026

Singapore Technologies Engineering Ltd

$ 10,242,637

$ 242,637

Mandarin Oriental International Limited

$ 9,513,313

$ (486,687)

Total

$ 101,038,912

$ 1,038,912

Table 2. Profit and Loss were being observed in four weeks (Group's Portfolio)

VI. Suggestion and Rejection

In my initial portfolio stock we should to choose OCBC and OUB for group initial portfolio stock because it can get more profit. So we can choose the better stock to earn more profit

V. Conclusion

After this report, I have more knowledge about investment stock and how people trade in market stock. Understand the risk and the lesson from investment stock. However in my ten stocks have the mistake when i invest to wrong company so I cannot earn more profit than group’s profit. But from my mistake in this report I can improve my knowledge and my skill in the future.



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