This Is The First Of Three Stock Journal Assignments You Wil

This Is The First Of Three Stock Journal Assignments You Will Complete

This is the first of three stock journal assignments you will complete during this course. For this assignment, you will select three publicly traded U.S. companies from different industries, decide how to divide a $25,000 investment among them, and determine the number of shares to purchase for each company based on their current share prices. You are to record your chosen companies, the share prices, and the number of shares purchased using the provided templates. Additionally, you will write a rationale or summary explaining your company choices and investment decisions.

Remember, investing in stocks involves risk, and the value of your shares can fluctuate. Each share entitles you to dividends and a voting right at shareholder meetings, but there is no obligation for the company to buy back your shares at a predetermined price. Your goal is to be close to your allocated investment amount in each company, based on current stock prices, understanding that you may need to buy fractional shares or round down to whole shares.

Paper For Above instruction

The process of investing in stocks represents a critical component of capital markets and the broader U.S. economic system. This exercise demonstrates practical investment decision-making, diversification strategy, and fundamental understanding of stock purchase mechanics. For this assignment, I selected three diversified U.S. companies: Amazon (AMZN), Uber Technologies (UBER), and Kroger (KR). These companies operate in different industries—retail e-commerce, ride-hailing and logistics, and grocery retail—thus exemplifying effective diversification, which is vital for risk management in investments.

My total investment capital for this exercise is $25,000, which I allocated as follows: $10,000 to Amazon, $8,000 to Uber, and $7,000 to Kroger. This allocation reflects a balanced approach, considering each company's growth potential, market stability, and my personal assessment of their future performance. Amazon, as a leader in e-commerce and cloud computing, offers growth prospects and dividend potential. Uber, though still expanding, has become a dominant player in mobility and logistics, representing a high-growth opportunity. Kroger, a stable grocery retailer, provides a dividend-paying, low-risk element to the portfolio.

For each company, I identified the current stock price from Yahoo! Finance and calculated the number of shares I could purchase with the allocated funds. For Amazon, priced at $3,250.00 per share, with $10,000, I could purchase approximately 3 shares ($10,000 / $3,250 ≈ 3.07), totaling $9,750. Buying 3 shares leaves $250 uninvested, which I accept as part of the rounding process. For Uber, with a share price of $44.50, $8,000 enables the purchase of approximately 179 shares (since 8,000 / 44.50 ≈ 179.10). Purchasing 179 shares costs about $7,975.50. Kroger's stock price is $55.60, and with $7,000, I can buy 125 shares (since 7,000 / 55.60 ≈ 125.89). The total investment for Kroger is roughly $6,950, leaving some cash uninvested.

The rationale for choosing Amazon stems from its dominant position in e-commerce, cloud computing, and digital services, with consistent revenue growth and a history of innovation. Uber was selected because of its leadership in ride-sharing, expansion into logistics and food delivery, and potential for future growth despite its profitability challenges. Kroger provides diversification by offering exposure to the retail grocery sector, which tends to be more stable and pays dividends, balancing the riskier growth stocks in the portfolio. This mix supports a balanced approach, combining growth and stability, aligning with modern investment principles.

In conclusion, this exercise demonstrates a practical approach to building a diversified stock portfolio within a specified budget. By selecting companies from different industries, determining share prices, and calculating purchase quantities, investors can manage risk and optimize their investments aligned with their financial goals. While stock prices fluctuate, and dividends are not guaranteed, making informed decisions based on current data and strategic diversification enhances the potential for favorable investment outcomes.

References

  • Yahoo! Finance. (2024). Amazon (AMZN) Stock Price. https://finance.yahoo.com/quote/AMZN/
  • Yahoo! Finance. (2024). Uber Technologies (UBER) Stock Price. https://finance.yahoo.com/quote/UBER/
  • Yahoo! Finance. (2024). Kroger (KR) Stock Price. https://finance.yahoo.com/quote/KR/
  • Malkiel, B. G. (2019). A Random Walk Down Wall Street (12th ed.). W. W. Norton & Company.
  • Brealy, R. A., Myers, S. C., & Allen, F. (2020). Principles of Corporate Finance (13th ed.). McGraw-Hill Education.
  • Investopedia. (2024). Diversification. https://www.investopedia.com/terms/d/diversification.asp
  • U.S. Securities and Exchange Commission. (2021). Investor Bulletin: Understanding Stock Trading. https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_stocktrading
  • Statista. (2024). E-commerce market revenue worldwide. https://www.statista.com/topics/871/online-shopping/
  • Federal Reserve. (2023). Consumer Data and Business Conditions. https://www.federalreserve.gov/
  • Wall Street Journal. (2024). Stock Market Data. https://www.wsj.com/market-data

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