Only Do Week 3 And Use Both Word And Excel Templates

Only Do Week 3 And Use Both Templates Word And Excel Use Your Knowl

Use your knowledge and experience to select three publicly traded U.S. companies. Make sure you are practicing good diversification. Diversification means you are not selecting three companies from the same industry. For example, you would not want to choose Target, Walmart, and Sam’s Club because they sell the same types of products. A better choice would be Amazon, Uber, and Kroger, because they sell different products and services.

Determine how you will divide $25,000 across the three companies (for example, $10,000 in Company 1, $10,000 in Company 2, and $5,000 in Company 3). Decide the amount you are investing in each company. You need not provide any analysis to justify your decisions. Provide a reason for picking each company. For example, you might invest in Ford because that company gets a lot of your money, and you hear that Ford is doing well and will continue to do well.

Identify the number of shares you are buying and the price of the shares you are buying for each company. Once you decide the companies and the amount you will invest in each company, determine how many shares you can buy. For example, if Company 1 is selling for $42.16, then you may buy $10,000/$42.16, or 237.19 shares. But you cannot buy a part of a share, so you decide to buy either 237 or 238. In this example, you buy 237 shares at $42.16 per share, investing $9,991.92. You will not be able to buy exactly $10,000, or $5,000, or $25,000, but it will be relatively close.

Paper For Above instruction

This investment project entails selecting three diverse publicly traded U.S. companies, dividing an investment of $25,000 among them, and calculating the number of shares purchased with the allocated funds. The process emphasizes diversification across different industries, investment allocation, and practical share purchase calculations based on current share prices. The purpose is to simulate a realistic portfolio construction process, focusing on strategic selection, allocation, and execution without requiring detailed justification for each company choice.

For this exercise, I selected Amazon, Uber, and Kroger, representing e-commerce, transportation, and retail grocery industries, respectively. These selections demonstrate good diversification, as they operate in distinct sectors with unique market dynamics and risk profiles. Amazon (AMZN) is a leading global online retailer, Uber (UBER) is a prominent ride-sharing and logistics company, and Kroger (KR) is a major domestic grocery chain. Each company has demonstrated resilience and growth potential, making them suitable for this portfolio.

The investment allocation I chose was $10,000 for Amazon, $10,000 for Uber, and $5,000 for Kroger. The reasoning behind this distribution is based on Amazon's dominant position and growth prospects, warranting a larger share of the portfolio. Uber's innovative transportation and delivery services present strong growth opportunities, influencing an equal allocation with Amazon. Kroger, as a stable and less volatile grocery retailer, comprises the smaller part of the portfolio, balancing the overall risk.

Based on current stock prices, Amazon's shares are approximately $3,200; Uber's shares are about $37; and Kroger's shares are roughly $45. Using these prices, I calculated the number of shares that could be purchased within the allocated amounts. For Amazon, dividing $10,000 by $3,200 gives approximately 3 shares (since fractional shares cannot be bought, I use 3 shares for a total investment of $9,600). For Uber, dividing $10,000 by $37 yields approximately 270 shares ($9,990). For Kroger, dividing $5,000 by $45 yields approximately 111 shares ($4,995). These transactions are close to the allocated funds, with minimal remaining cash left uninvested.

The practical calculation ensures that the investment is realistic, demonstrating how investors decide on share quantities based on current prices and total investment goals. Changes in market prices could slightly alter these figures, but the methodology remains consistent—allocate funds based on desired diversification and calculate the approximate number of shares purchasable at prevailing prices.

Excel Template Summary

• Company Names: Amazon, Uber, Kroger
• Allocation: $10,000, $10,000, $5,000
• Share Prices (approximate): Amazon - $3,200, Uber - $37, Kroger - $45
• Shares Bought: 3, 270, 111
• Approximate Investment: $9,600, $9,990, $4,995

This exercise demonstrates core investment principles such as diversification, allocation strategies, and practical share purchasing calculations, providing a foundational understanding of portfolio management.

References

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• S&P Global. (2023). Market Intelligence. Retrieved from https://www.spglobal.com
• U.S. Securities and Exchange Commission. (2023). Investor Bulletin: How to Read a Stock Quote. Retrieved from https://www.sec.gov
• Yahoo Finance. (2023). Amazon (AMZN), Uber (UBER), Kroger (KR) Stock Price. Retrieved from https://finance.yahoo.com
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• Markowitz, H. (1952). Portfolio selection. The Journal of Finance, 7(1), 77-91.
• Siegel, J. J. (2014). Stocks for the Long Run (5th ed.). McGraw-Hill Education.