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Class Project: INVESTMENT REPORT

Objective: Invest (individually or in a group) a hypothetical amount according to your own requirements and preferences for risk.

Approach: Students (individually or in a group) will invest a hypothetical amount and will write and present an Investment Report including an investment plan (Phase 1: Outline), objectives, rationale and conclusions for decisions, financial overview, etc. 

Phase 1:  Prepare an Outline: Your outline is a general plan for your report and can include information about these areas:

• Amount to be invested
• Portfolio return (expected vs. actual)
• Requirements and risk preferences
• Rationale for decisions
• Portfolio composition (with investments identified)
• Market information
• Information on assets in portfolio
• Financial overview

• Portfolio returns - calculate portfolio returns = (ending bal. - beginning bal)/beginning bal.
• Requirements and risk preferences - what return did you expect and what level of risk did you take.
• Rationale for decisions (allocation) - specific reasons why assets (stocks, binds, etc.) were selected.
• Portfolio composition - what assets are included in your portfolio and total portfolio value.
• Market information - business industry and competition of assets.
• Information on individual assets in portfolio - company's ticker symbol, trading exchange, industry, current price, profile of the company, etc.
• Financial overview - your portfolio’s balance sheet and income statement (total balance of invested amount and net gain).

• Pick stocks that are of interest to you.
• Analyze your selections: look at annual reports, financial statements, and historical price charts (It is important to dissect the information you obtain).
• Equities - stick to companies that report steady annual earnings and growth (favor stocks/companies with rapidly growing earnings. Low valuation to high future earnings potential is good).
• Technique - develop a mix constructing a portfolio around a core. Choose a handful of great mostly blue chip companies that you plan to hold for the long run and build some more speculative investments around them. Note: All stocks trade at a spread (difference between bid and offer price). Limit orders can save money they take longer to execute, good-till-canceled GTC-trade won't clear unless the issue drops down to your price point. Consider that "market timing" rarely makes sense in investing.
• Monitor investments by preparing a tracking spreadsheet and/or chart from the time of investment acquisition (your portfolio start date).
• Meet regularly, e.g. weekly (in person or electronically) with your group to discuss your progress and plan.
• Use all available resources for your final project (a large percentage of the grade depends on the Project): PowerPoint for the presentation, the Internet for your research and discussions, interview financial managers, use reference material--The Chicago Manual of Style from the DePaul Library, etc.
• Document your bibliography.
• Prepare an submit report with your presentation where you include your analysis, learnings and summarized reference material.

• Monitor investments by reading regularly a publication, read quarterly reports, annual reports and keep good records.
• High ownership by inside management is a good sign.
• Asset allocation - Investment capital into market (money above and beyond what is needed to live). Should never put more than 5% of total assets into a single investment or industry (different issues).
• Sell when the price appreciates or depreciates to some arbitrary level, such as 20 to 30 percent above or below cost.
• If something happens to the prospective potential, obviously sell.
• Once you buy stock in a company you become part owner and should act accordingly
• There are no guarantees on gains.
• Keep in mind that all securities carry a level of risk.
• The lower the current percentage of institutional ownership in a stock the better.