Prudent Investing
The culture of investment is spread world over. Every human kind will yearn to undertake investment at one point or other. Whatever the investment one chooses to venture into, the objective remains constant. The motive is to have some profits or some returns. In foretelling the returns several considerations will be put into considerations. A few assumptions are also made in the process of projecting the returns of the firm at any given point.
The source and availability of funds should be put into consideration. In the case in question the amount available should be taken as a loan because of the condition attached on the money. Besides, rate of interest on the loans should be considered so as to assist in calculating the returns net return on the investment after the commitments have been settled. The loan in question is assumed zero rated.
The period of repayment should equally be considered. This will guide in the type of investment to settle on. In this case the period of repayment is 4 month, which is relatively short. This means whatever investment is chosen should give returns within as short a period as three and half months. Further consideration should be given for amount of money available. Some investment would need relatively large amounts to undertake them. Given that the amount is substantive enough several options can be identified.
The trends in the market should equally be put into consideration. This is done by monitoring the financial markets through the media or stock market agencies. Not just any agency can be relied upon. Whatever agency that is picked should be beyond any reproach. This trend should be monitored over a period of time to establish the stability of the trend. In the analysis, consumer price indexes are of great importance.
Other market factors should also be considered. Such factors can include the general business trend in the financial markets. The stability of the larger economy is also of great help in making this decision (Thomas P. A., p 179). In countries that are experiencing inflation, whichever type of inflation, thee investment decision should be dully analyzed.
Within the precincts of the aforementioned pointers I do settle on short term capital investment. I choose to purchase shares from the following companies after studying their market trend and seeking capitalization from United World Capital, I settle on the following companies to invest in their shares.
Polaris Industries Inc has a capital base of 125 billions. It had an initial 23 profit after tax and has projected a 32 profit in the current financial year. The company is receiving, an average over subscription of 84 in share applications. In this company I invest 135000. I show interest in Apple inc. that has a capital base of 267 billions Apple inc. has had an initial after tax profit of 18. However it has had a 1st quarter profit of 37 showing high prospects probably because of the fact that it has launched a new iPad into the market. The projected profit of the company is estimated at 29. In this company I invest 105 000. Steel Dynamics Inc has a capital base of 84 billions. Its profit projection is put at 21. The previous years profit after tax was 20.5. In this company I invest 85000. From my analysis my fourth choice is Colgate-Palmolive Co. the company has recorded 26 quarter profit with projected profit of 23 after tax. The company has a capital base of 101billions. In this company I invest 90500. I opt to invest my balance capital of 82000 in UUNET Technologies Inc. the company has a capital base of 279 billions. The company had an initial post tax profit of 18. The remained 2200 is spent on brokerage.
The companies have there shares valued currently at 132, 104, 265, 98, 79 and 108 respectively. Having invested in the companies I wait with belated breath as the stock market varies with every day count. My brokerage firm keeps calling to give me briefs of the goings-on. Encouraging enough it is apparent that the economic grunge is loosening its grip on America. Jobs are being created making the market very aggressive. Most shares are showing upward trends.
The stabilizing, US economy has generally done me proud. Within the 4 months, several factors came into play that did warrant my success. While the US economy was initially experiencing a grunge, there were indicators that the economy was recuperating from the strain (Lieberman I W., Kirkness, C.D., p 132). Consequently, the incomes of most residents were on the increase. This had increased the marginal propensity to consume of most residents. The marginal propensity to invest was on an increasing trend. This forced the demand for most of the equities to increase. Similarly, with increased MPC, the consumption of industrial products made most of the companies to have high turnovers and in return increased profit. With these factors in play the securities and equity market was booming.
At the close of my trading period, shares were selling at a significantly high price
Name of company
AInvestment
Total in
BCost price per share
CTotal shares
DBCSelling price per share
EProfit per share.
FE-CTotal share profit
GDFPolaris Inc1250001329471511917993Apple Inc.13500010412981272329854Steel D Inc105000265,396286218316Colgate-Palmolive Inc90500989231121412922UUNET Tech Inc.820001087591271914421Totals497500432383506From this table it is evident that ROCI was relatively high given the short span of time available.
ROC Profit
Capital Invested
83506
500000 0.16
This was a relatively high rate of return.
Evidently, market factors and force play a very important role in the outcome of any investment. In view of this once investors undertake any investment it is important to monitor closely the market factors.
The culture of investment is spread world over. Every human kind will yearn to undertake investment at one point or other. Whatever the investment one chooses to venture into, the objective remains constant. The motive is to have some profits or some returns. In foretelling the returns several considerations will be put into considerations. A few assumptions are also made in the process of projecting the returns of the firm at any given point.
The source and availability of funds should be put into consideration. In the case in question the amount available should be taken as a loan because of the condition attached on the money. Besides, rate of interest on the loans should be considered so as to assist in calculating the returns net return on the investment after the commitments have been settled. The loan in question is assumed zero rated.
The period of repayment should equally be considered. This will guide in the type of investment to settle on. In this case the period of repayment is 4 month, which is relatively short. This means whatever investment is chosen should give returns within as short a period as three and half months. Further consideration should be given for amount of money available. Some investment would need relatively large amounts to undertake them. Given that the amount is substantive enough several options can be identified.
The trends in the market should equally be put into consideration. This is done by monitoring the financial markets through the media or stock market agencies. Not just any agency can be relied upon. Whatever agency that is picked should be beyond any reproach. This trend should be monitored over a period of time to establish the stability of the trend. In the analysis, consumer price indexes are of great importance.
Other market factors should also be considered. Such factors can include the general business trend in the financial markets. The stability of the larger economy is also of great help in making this decision (Thomas P. A., p 179). In countries that are experiencing inflation, whichever type of inflation, thee investment decision should be dully analyzed.
Within the precincts of the aforementioned pointers I do settle on short term capital investment. I choose to purchase shares from the following companies after studying their market trend and seeking capitalization from United World Capital, I settle on the following companies to invest in their shares.
Polaris Industries Inc has a capital base of 125 billions. It had an initial 23 profit after tax and has projected a 32 profit in the current financial year. The company is receiving, an average over subscription of 84 in share applications. In this company I invest 135000. I show interest in Apple inc. that has a capital base of 267 billions Apple inc. has had an initial after tax profit of 18. However it has had a 1st quarter profit of 37 showing high prospects probably because of the fact that it has launched a new iPad into the market. The projected profit of the company is estimated at 29. In this company I invest 105 000. Steel Dynamics Inc has a capital base of 84 billions. Its profit projection is put at 21. The previous years profit after tax was 20.5. In this company I invest 85000. From my analysis my fourth choice is Colgate-Palmolive Co. the company has recorded 26 quarter profit with projected profit of 23 after tax. The company has a capital base of 101billions. In this company I invest 90500. I opt to invest my balance capital of 82000 in UUNET Technologies Inc. the company has a capital base of 279 billions. The company had an initial post tax profit of 18. The remained 2200 is spent on brokerage.
The companies have there shares valued currently at 132, 104, 265, 98, 79 and 108 respectively. Having invested in the companies I wait with belated breath as the stock market varies with every day count. My brokerage firm keeps calling to give me briefs of the goings-on. Encouraging enough it is apparent that the economic grunge is loosening its grip on America. Jobs are being created making the market very aggressive. Most shares are showing upward trends.
The stabilizing, US economy has generally done me proud. Within the 4 months, several factors came into play that did warrant my success. While the US economy was initially experiencing a grunge, there were indicators that the economy was recuperating from the strain (Lieberman I W., Kirkness, C.D., p 132). Consequently, the incomes of most residents were on the increase. This had increased the marginal propensity to consume of most residents. The marginal propensity to invest was on an increasing trend. This forced the demand for most of the equities to increase. Similarly, with increased MPC, the consumption of industrial products made most of the companies to have high turnovers and in return increased profit. With these factors in play the securities and equity market was booming.
At the close of my trading period, shares were selling at a significantly high price
Name of company
AInvestment
Total in
BCost price per share
CTotal shares
DBCSelling price per share
EProfit per share.
FE-CTotal share profit
GDFPolaris Inc1250001329471511917993Apple Inc.13500010412981272329854Steel D Inc105000265,396286218316Colgate-Palmolive Inc90500989231121412922UUNET Tech Inc.820001087591271914421Totals497500432383506From this table it is evident that ROCI was relatively high given the short span of time available.
ROC Profit
Capital Invested
83506
500000 0.16
This was a relatively high rate of return.
Evidently, market factors and force play a very important role in the outcome of any investment. In view of this once investors undertake any investment it is important to monitor closely the market factors.
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