Feedback for Paper: Research Assignment #1
Strengths:
Your paper applies the top-down investment strategy effectively, integrating macroeconomic, sectoral, and asset-specific analyses. The choice to diversify between Technology, Consumer Staples, and Treasury bonds demonstrates a thoughtful approach to balancing growth potential with stability. The use of reputable sources such as FRED and Trading Economics adds depth to your research, and your analysis of key macroeconomic indicators like inflation, interest rates, and yield curves is insightful. The inclusion of specific financial metrics and performance data for each sector strengthens your investment rationale.
Suggestions for Improvement:
1. Grammar and Clarity:o Rewording: “The allocations will be based on market trends, outlined at $50,000 for each sector” → “Allocations are distributed equally between sectors, with $50,000 designated to each.”o Replace “consumer stables sector” with “Consumer Staples sector” for consistency.2. Portfolio Justification:o Expand on why specific allocations to individual companies within each sector were chosen (e.g., why Apple received the highest allocation in Technology, or why Unilever was emphasized over other Consumer Staples options).o Provide a brief explanation for including Treasury bonds, particularly how they mitigate risk in the current economic climate.3. Economic Context:o While your analysis of macroeconomic indicators is solid, connect these trends more explicitly to the performance and risks of individual sectors (e.g., how rising interest rates might uniquely affect Technology versus Consumer Staples).4. Formatting and Data Presentation:o Add a pie chart or bar graph to visually represent the portfolio allocations.o Include a concise summary table for financial metrics such as P/E ratios, EPS, and dividend yields of your selected investments for clarity.
This paper demonstrates a strong understanding of the top-down investment approach and effectively meets the assignment objectives. To improve, focus on deepening the portfolio justification and enhancing the connection between economic trends and sectoral performance
Investment Research part 2: updated trends and portfolio analysis
2 additional pages (typed, double-spaced, inclusive of graphs/charts; add below within prior Research Assignment #1 document): Due Date: Last day of class, or ~12/13/24
Assignment Objective: Provide an opportunity to revise prior research, update economic understanding, assess choices based on new statistics and information, and adjust portfolio to ensure optimal mix of investments given provided funds.
Step 1: Revise
Review comments provided by professor in Research Assignment #1: Top-Down Approach. This is your chance to improve your written analysis if you are unhappy with your grade! Update the paper with responses to provided feedback. The better you did previously, the easier this section should be ?
Step 2: Economic Update (1-2 paragraphs)
Add a brief “economic update” section to your paper.
• Include recent indicators released since your prior analysis (e.g., inflation trends, employment rates, business cycle updates).• Discuss their implications for your portfolio decisions.• Alternative Method: Instead of Telemet, use freely available tools:1. Yahoo Finance: Search economic terms like “U.S. inflation” or “current unemployment rate” for updates.2. FRED (Federal Reserve Economic Data): Go to https://fred.stlouisfed.org and search for specific indicators.3. Market News: Visit reputable websites such as The Wall Street Journal, Investopedia, or CNBC.
For example:
• Inflation: Search “current U.S. inflation rate” and compare it to your previous analysis.• Employment: Use Bureau of Labor Statistics data or Google “current U.S. unemployment rate.”• Business cycle: Refer to analyst commentaries or macroeconomic trends via Yahoo Finance or CNBC.
Step 3: Performance Analysis (Insert Spreadsheet)
Create a spreadsheet that tracks the performance of your investments.
• Individual Investments:o Two columns: Original spot price (at time of selection) and current spot price.o Third column: Percent change in value since your first analysis.
Use Yahoo Finance (or your favorite alternative):
1. Visit finance.yahoo.com.2. Enter the ticker symbol (e.g., AAPL).3. Use historical charts to find prices from your original analysis date and today.4. Record the values in your spreadsheet.
Optional Extra Credit:
• Add a column for sector performance (e.g., compare the performance of a tech ETF like XLK to your chosen tech stock).• Include P/E or P/B ratios (Google “average P/E for [sector]” and compare it to your stocks).
Step 4: Sector Comparison (0.5-1 page)
Analyze your investments relative to their sectors.
• Method:1. Yahoo Finance → Ticker Symbol → “Chart.”2. Select “Comparison” and input an ETF ticker that represents the sector of your investment.Example: Compare Apple (AAPL) to XLK (Technology ETF).3. Discuss whether your investment outperformed or underperformed its sector.
Optional Extra Credit:
o Evaluate valuation metrics (e.g., compare P/E ratios of your investments vs. their sectors).
Step 5: Predictions (0.5-1 page)
Discuss whether you would hold, sell, or swap your investments based on updated information.
• Are your investments still aligned with macroeconomic trends?• Do they continue to meet your risk-return goals?