INVESTMENT STRATEGY REPORT Submitted to J. D. Williams, Inc. By Mizar Gonzalez Industrial Engineering Department Southern Polytechnic State university 404-519-2792 February 20, 2008 EXECUTIVE SUMMARY This report is our recommendation for an optimal investment strategy that would allow J. D. Williams, Inc. to maximize the annual yield of an investment of $800,000 in a diversified portfolio of funds. To find the investment that would result in the greatest annual yield we have formulated a linear program that takes into account the requirements for the client of J. D. Williams, Inc. The requirements for the investment portfolio can be found on the section titled “Problem Description” The greatest annual …show more content…
The client will realize an annual yield on the $800,000 investment of $94,133.33 if it is allocated in the following manner. The amount to be invested in the growth fund must be $ 248,889. The income fund must have an investment of $ 160,000 and the money market fund must have an investment of $ 391, 112. The solution is not surprising given the requirements for the investments. The amount invested in the growth fund yields the greatest revenue but has to be less than 50% of the total investment and is also limited by its high risk index. The amount is greatest when invested in the money market fund because it balances the greater risk the other funds are subjected to. Problem answers If the client’s risk index was increased to.055 the investment would be affected in the following manner. The optimal solution becomes $ 98, 800 and the funds would be allocated in the following manner: Growth fund $ 293, 334, Income fund $ 160, 000, and Money Market fund $ 346, 667. If the original problem is consulted and the annual yield of growth fund is downgraded to 16% the optimal solution would change to $92, 934 with the funds invested in the following manner. Growth fund $ 293, 334, Income fund $ 160, 000, and Money Market fund $ 346, 667. The yield of the growth fund still justifies having a large amount of the portfolio
For Investment B: (40 – 5)/ 30= 1.16 standard units= close to 88% to get the 40 million in
required return of 24% for a project of it's risk. The dilemma for General Foods was to
1. Which firms are the “identical twins” of the Collinsville investment? Using the β’s for those assets and the methodology learned in this course, determines the appropriate discount rate for the Collinsville investment.
investor should invest $369.35 in asset A and the remaining $630.65 in asset B. The
This Fund is targeting the following annual return for Limited Partners; class A Shares will have a 5% per annum, plus a limited share of profits, on invested capital. Class B shares will have approximately 10% - 15% per annum. However, these anticipated returns (which is not a guarantee of performance) is based on good faith assumptions
Angus Cartwright III, an investment advisor, was asked to provide investment advisory services for two clients, John DeRight and Judy DeRight. They both wanted to purchase a property that (1) is large enough to attract the interest of a professional real estate management company and (2) has a minimum leveraged return on their investments of 12% after
I strongly advocate tactical asset allocation process and diversification over several different income and growth strategies. I believe that risk management and protection of investor's endowment are major objectives. In my portfolio, stocks may occupy a large portion and the
The executives of Davis, Michaels, and Company need help running their financial planning services. They must decide whether their assistant Janet can practice the fundamental concepts of finance efficiently enough or higher a temporary employee to help them conquer the overwhelming demand of their customers. Janet was given a variety of different DCF analysis questions to determine her skills. The main goal of every problem was to find the best investment strategy for different people that were trying to save up for an important investment in their future. In conclusion, by completing the tasks given and solved below, Janet has proved that she can handle the position
In order to find the optimal portfolio allocation, the group needs to find the portfolio structured with lowest risk under a given return. This can be achieved by applying Mean-Variance Theory and Markowitz model find the efficient frontier, which yields the most optimal portfolio under given returns. It can be expressed in mathematical terms and solved by quadratic programming. [Appendix A]
An investment firm with the name of J.D.Williams, Inc. helps many of its clients invest over $120 million for the last 40 years. We have many personal investors helping many individuals with their investments. We create personalized plans for our clients depending on their needs. Our company has multiple methods to help its clients with investments. We use many different approaches when it comes to assessing and making an appropriate plan for the investment.
7. How might you use this three asset optimal-allocation model to construct and graph an
In 2005, the vice president, chief investment officer, and their investment team met in order to compose a new asset allocation policy for the foundation’s investment portfolio worth $6.4 billion. One of the proposal’s suggestion was to reduce the overall exposure of the investment portfolio to domestic public equities. The proposal would also increase the allocation to absolute return strategies (with an “equitizing” and “bondization” program) and to TIPS. The new policy would slightly increase the Sharpe ratio of the foundation’s portfolio. They also needed to make a decision on a recommendation to pledge about 5% of the total value of the portfolio to Sirius V, which was the latest fund that specialized in global distressed real estate investments.
Assume that one of Philip’s clients is a married man, aged 36 with two young children, who wishes to reallocate a significant portion of his retirement funds that are currently invested in certificates of deposit. Philip recommends a growth investment, and he identifies the three representative possibilities shown in Table A.
Mutual fund also offers good investment opportunities to the investors. Like all investment, they also carry certain risks. The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions. The Indian mutual fund industry has witnessed several structural and regulatory reforms.
The Equity Index Fund (GEQZX) is a Biblically Responsible Investment (BRI) fund created by GuideStone Funds. The objective stated in the prospectus is to gain the same performance as the S&P 500 Index by investing in the same components. The screening process is to recreate the S&P 500 by investing in the same assets which include 486 different holdings. All of the companies in the mutual fund will have the same weight as they do in the index it is following. The mutual fund does maintain some cash with a 2% allocation for liquidity purposes. The mutual fund has shared close returns. The returns are within 1% of the benchmark, S&P 500, as shown in Figure 1 acquired from GuideStone’s website. There are two share classes which are Investor and Institutional. To invest in the Investor Class shares a minimum initial investment of $1,000 is required. Subsequent investments must be at least $100. The management fee is 0.10%. The gross expense ratio is 0.43%. The net expense ratio is 0.42%. There is no 12 b-1, Redemption fees, or Sales Charge. The portfolio turnovers for each year between January 1, 2011 and December 31, 2015 were 4%, 3%, 4%, 5%, and 6% respectively. The fund’s sector allocation is 12.8% Consumer Discretionary, 8.8% Consumer Staples, 7.8% Energy, 16.6% Financial Services, 12.6% Health Care, 10.7% Industrials, 20.8% Technology, 3% Materials, 3.1% Telecommunications, and 3.8%