Stock Journal Assignment: This Is The First Of Three Stocks

Stock Journal Assignmentthis Is The First Of Three Stock Journal Assig

Set your assignment templates from this assignment and update them for Weeks 8 and 10. Use two provided templates: one to enter your selected companies, share prices, and share quantities within a $25,000 budget; the other to write your rationale or summary. Complete, save, and upload both templates simultaneously when submitting. Use the Excel tutorial videos provided to learn how to use Excel before starting. You may use the provided template or create your own based on it.

Imagine you have $25,000 to invest in U.S. companies, purchasing stocks you believe will generate dividends and appreciate in value. Remember, stocks are risky; your invested amount depends on market conditions and other investors' willingness to buy your shares later. You are not guaranteed to recover your full investment.

Choose three publicly traded US companies that practice good diversification—preferably from different industries. For example, select Amazon, Uber, and Kroger, rather than Target, Walmart, and Sam’s Club. Use resources like the NYSE, NASDAQ, Yahoo Finance, or The Wall Street Journal for stock price information.

Decide how to allocate your $25,000 across these companies, e.g., $10,000 each for Companies 1 and 2, and $5,000 for Company 3. No detailed justification is required, but provide reasons for your choices, such as believing in the company's growth prospects.

Determine the number of shares to buy and consider the current share price for each company. For instance, if a stock costs $42.16 per share and you invest $10,000, you can buy approximately 237 shares ($10,000 / $42.16). Since fractional shares are not possible, round to the nearest whole number (either 237 or 238 shares). The total invested may not exactly equal your initial amount but should be close.

Use the provided Excel template for your calculations and updates in Weeks 3, 8, and 10. Keep the template saved after entering your data to track stock performance over time. When submitting, you may also create your own template or use Word, provided it communicates all required information clearly.

Paper For Above instruction

Creating a diversified investment portfolio is a fundamental principle for mitigating risk and optimizing returns, especially for individual investors operating within a fixed budget. In this analysis, I have selected three distinct U.S.-based companies from different industries—Amazon, Uber, and Kroger—to exemplify effective diversification while aligning with my $25,000 investment capital. My choices reflect a combination of growth potential, market stability, and industry relevance, grounded in current market trends and economic forecasts.

Company Selection and Rationale

Amazon.com, Inc. represents the e-commerce and cloud computing sector, which has demonstrated resilient growth over recent years. Amazon's diversified revenue streams, including online retail, Amazon Web Services (AWS), and subscription services, position it well for continued expansion. Investing in Amazon aligns with my belief in the dominance of e-commerce and cloud technology, which are expected to grow as digital transformation accelerates.

Uber Technologies Inc. stands as a leader in ride-sharing and logistics services, sectorally distinct from retail and technology. Uber's diversification into freight and delivery services and its expanding global footprint make it a promising choice. Furthermore, Uber's investments in autonomous vehicles and food delivery services contribute to its growth prospects, making it an attractive addition to my portfolio based on its innovative approach and market adaptability.

Kroger Co., a major player in the grocery retail industry, offers stability and regular dividend payments. With the ongoing consumer shift toward online grocery shopping and the integration of digital tools into grocery experiences, Kroger presents an opportunity for steady income and potential appreciation. Its established presence and focus on omnichannel retailing provide a counterbalance to the high-growth tech stocks, serving as a stabilizer within my diversified portfolio.

Allocation Strategy

For practical diversification, I allocated $10,000 each to Amazon and Uber, and $5,000 to Kroger. This distribution balances higher-risk growth stocks with a more stable dividend-paying company. The allocation reflects my confidence in Amazon's and Uber's growth trajectories, while Kroger's role is to provide income stability amidst market volatility.

Calculation of Shares

Using recent market prices, I calculated the number of shares purchasable with my allocated funds:

  • Amazon: Share price of $3,200; purchasing $10,000 yields approximately 3 shares ($10,000 / $3,200). Since fractional shares are not possible, I buy 3 shares, investing $9,600, leaving a small balance.
  • Uber: Share price of $45; purchasing $10,000 allows for approximately 222 shares ($10,000 / $45). The total investment would be approximately $9,990, close to the allocated amount.
  • Kroger: Share price of $45; purchasing $5,000 yields approximately 111 shares ($5,000 / $45). This investment totals about $4,995, maintaining the budget constraints.

This calculation ensures close adherence to my budget considerations while providing a diversified mix of assets.

Concluding Observations

The selection of Amazon, Uber, and Kroger aims to balance growth potential with income stability, reflecting my investment philosophy of diversification. While market fluctuations could affect individual stocks differently, this portfolio structure allows me to engage with multiple sectors of the economy, enhancing resilience over time. Continual monitoring through the provided excel template will enable tracking stock performance and making informed decisions for future adjustments.

References

  • Amazon. (2023). Annual Report 2022. Amazon.com, Inc. Retrieved from https://ir.aboutamazon.com/annual-reports
  • Uber Technologies Inc. (2023). Form 10-K. Uber Technologies, Inc. Retrieved from https://www.sec.gov/Archives/edgar/data/1543151/000154315123000027/uber-20221231.htm
  • Kroger Co. (2023). Financial Statement Summary. The Kroger Co. Retrieved from https://www.kroger.com/investors
  • Yahoo Finance. (2023). Stock Prices and Historical Data. Retrieved from https://finance.yahoo.com
  • U.S. Securities and Exchange Commission. (2023). EDGAR filings database. https://www.sec.gov/edgar/searchedgar/companysearch.html
  • MarketWatch. (2023). Market Data and Investment Tools. https://www.marketwatch.com
  • Securities Industry and Financial Markets Association. (2022). Industry Diversification Strategies. https://www.sifma.org
  • Investopedia. (2022). Diversification. https://www.investopedia.com/terms/d/diversification.asp
  • Financial Industry Regulatory Authority (FINRA). (2023). Investor Education and Resources. https://www.finra.org/investors
  • Strayer University. (2023). Stock Investment and Portfolio Management. Course materials and resources.

Related Assignments