Finance Essay on risk management and investment

Finance on risk management and investment - Essay Example various methods of analysis, reconstruction forget be used. The process will involve majorly facial expressioning at the opposite motley of risks inherent in the portfolio and determining ways on how to reduce the risk. Executive Summary The investor seeks to come up with a well-structured portfolio that will serve him the purpose of better arrests in the future. The investor has identified seven stocks namely Barclays, BP, Lloyd Banking, European FTS, ISHARES CHINA, EFTS CMOD SECS, MSCI BRAZIL, and TUI TRAVEL. The investor intends on invest in stock shargons as his major line of returns. The portfolio seems diverse as it entails stocks from different regions. The shares are all have a fair unpredictability ranging from a minimum of 4% -13%.This is a major strength in the portfolio as the investor will be least faced by shares that are quite elastic. However, in my view, the investor poses as single who is a traditiona l investor. He selects only share stocks and avoids investing in different securities such as bonds. There arises a risk in investing shares one can never tell the exact time to sell them off as predicting when such shares will appreciate becomes a hustle. At the same time, all these companies issue out dividends. For investor companies, investors prefer that they maintain their levels of dividends so that such monies can be used in investing in other opportunities that would profit the troupe. In reconstructing the portfolio, I t will involve computeing at the risk levels associated with the different kind of stocks and look into eliminating the least favourable ones either through statistical analysis or by going by what the market proposes. While analysing the portfolios past performance, it will entail looking at how the individual stocks performed. Our portfolio is composed of candor handbagd investments. This will entail looking at how the individual shares performed in th e industry and across other stocks. In our case, our cut-off date will be on January 1 ,2020 for the purpose of buying stocks. Barclays With Barclays stock, the return on equity has decreased significantly all over the grades from 23.41% to 5.65% in year 2009 through to year 2011.This means that the company has been making low returns over the years or has very high operating(a) costs. At the same time, the company could be having very high equity levels. The price per share for the company is quite low at 2.51, meaning that it is not a very favourite stock among investors or alternatively, the investors foresee a likelihood of the prices going up. Its good to note that the companys volatility is a bit high at 10%.This means that the stock is likely to affect a large investor upon any change in the market conditions. The earnings per share has also increased over the years from 25.1 to 35.9 from year 2010 to 2012.This is a very appointed remark for the investor as over the years they amaze value for their money. The stock also pays out dividends to its shareholders at the end of every financial year. This would be a good indication to a normal investor who looks into trading with shares. However, for the investors portfolio this would not be a positive move as the investor would view the company as failing in investment decisions. Usually, investors prefer companies that look to invest their funds in the most profitable investments, companies that can manage to increase their asset base too. The company floats only 87% of its shares and has an