Instructions: See the Discussion board for instructions for the three parts of the stock market project. CERTIFICATION OF AUTHORSHIP: I certify that the individual named above completed the assignment that is attached. Any assistance received in its preparation is fully acknowledged and disclosed in the paper. Any sources from which the individual used data, ideas or words, either quoted directly or paraphrased is also disclosed. It has been an interesting journey with the stock market these last couple months.
This is my first experience ever in contact with stock market and of course studying and understanding it. Honestly, I still feel like an “idiot” in that market but “less idiot” than before. When I picked the stocks to study I tried to pick firms I knew tech, or contractors without even doing a study on them. I had no idea that Apple was going down since September 2012 (well it’s starting to rise again). I didn’t pay attention that my portfolio was heavy on tech companies and I head no clue that it might be smart to invest even in “bad” companies.
Well, I didn’t learn something and here are some of my findings. It is kind of tricky to think if it’s a good time for short or long – term investments. The current reality in today’s market is that stocks will undergo multiple price change. Even stocks that lose money if held for a year or longer may be very profitable at several times during the year. The future is the only thing that matters. There is no way to know in advance how long a given stock should be held. Over the short term, the behavior of the market is based on enthusiasm, fear, rumors and news.
Over the long term, though, it is mainly company earnings that determine whether a stock’s price will go up, down or sideways. On the face of it both stock markets and casinos look very similar. When you play roulette you don’t know whether you are going to be lucky and win, similarly when you buy a stock, you have no clue whether the price will go up or down the next day. (Well, at some point few “experts” pretend to know how to predict for both cases) The casino is mostly irreversible decisions. You put your money down and you take your chances.
That is totally an irreversible decision. Decisions with stocks are totally reversible. I can buy a stock and sell it the next minute. Sure it can cost money to change my mind but I can still change my mind. When you put your money down in slot machines, you cannot change your mind. When you go to a casino, it’s only a die-hard gambler who thinks he will definitely make money. Most of us go for a bit of entertainment and know that we in all likelihood will lose all the money before we comeback from an exciting trip.
On the other hand when you invest money in the stock market and build a portfolio of 10-15 stocks, you are actually investing in the future of these companies. Highly unlikely that if you have chosen these companies with care, all of them will do badly and you will lose all your money! However, what it does suggest is that if you are invested long enough, you will gain from some of the sharp upswings and eventually make a reasonably good return. On the other hand, if you are a trader and are betting on day to day directional movement of the market, you can lose money if your bets are wrong.
Business is not risk free and to that extent neither can stock markets be. But by diversifying across multiple companies you are reducing your risk. Diversifying – which means buying different types of investments — lessens the risk because even if some of the holdings go down, others may go up (or at least not go down as much). On the flip side, a diversified portfolio is unlikely to outperform the market by a big margin. But at least there is less risk. That way, if one area of the economy goes into the dumps, you have something to fall back on.
As for QQQ and Spider, I’m not sure if I would waste time on investing. It feels like energy consuming. They could diversify the portfolio considering what they represent but not sure if they are worth it. Sources: (n. d. ). Retrieved from http://en. wikipedia. org/wiki/Google (n. d. ). Retrieved from http://finance. yahoo. com/ Appendix I Companies Information 1. Name of company: Google Inc. Stock/Trading symbol: GOOG Google Inc. is an American multinational corporation specializing in Internet-related services and products.
Its mission statement from the outset was “to organize the world’s information and make it universally accessible and useful”, and its unofficial slogan was “Don’t be evil”. Rapid growth since incorporation has triggered a chain of products, acquisitions, and partnerships beyond Google’s core search engine. It offers online productivity software including email, an office suite, and social networking. Google Inc. was founded in 1998 and is headquartered in Mountain View, California. Direct competitors are: FB = Facebook, Inc. , Pvt1 = MSN (privately held), YHOO = Yahoo! Inc.
Revenues as of March 31, 2013: 53. 50 B and EBITDA: 16. 81 B 2. Name of company: Amazon. com INC. Stock/Trading symbol: AMZN Amazon. com, Inc. operates as an online retailer in North America and internationally. The company serves consumers through its retail Websites and focuses on selection, price, and convenience. It offers Kindle Direct Publishing, an online platform that lets independent authors and publishers to make their books available in the Kindle Store; and programs that allow authors, musicians, filmmakers, app developers, and others to publish and sell content.
The company manufactures and sells the Kindle e-reader devices. Amazon. com, Inc. was founded in 1994 and is headquartered in Seattle, Washington. As of March 30, 2013, revenues are: 63. 98 B and EBITDA 2. 71 B 3. Name of company: Lockheed Martin Corporation Stock/Trading symbol: LMT Lockheed Martin (NYSE: LMT) is an American global aerospace, defense, security, and advanced technology company with worldwide interests. It is headquartered in Bethesda, Maryland, in the Washington Metropolitan Area. Lockheed Martin is one of the world’s largest defense contractors.
Lockheed Martin operates in five business segments: Aeronautics, Information Systems & Global Solutions, Missile and Fire Control, Mission Systems and Training, and Space Systems. In both 2009 and 2008 the company topped the list of US Federal Contractors. Mission Statement: Lockheed Martin is a diversified technology company serving the needs of United States government, military and selected international customers. Direct Competitors: BA = The Boeing Company, NOC = Northrop Grumman Corporation, RTN = Raytheon Co. Revenues as of March 31, 2013: 46.
96 B and EBITDA: 5. 28 B 4. Name of company: General Electric Company Stock/Trading symbol: GE General Electric, or GE, is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States. The company operates through four segments: Energy, Technology Infrastructure, Capital Finance and Consumer & Industrial. In 2011, GE ranked among the Fortune 500 as the 6th-largest firm in the U. S. by gross revenue, as well as the 14th most profitable.
However, the company is currently listed the 3rd-largest in the world among the Forbes Global 2000, further metrics being taken into account. Direct Competitors: C = Citigroup, Inc. , PHG = Koninklijke Philips N. V, SI = Siemens Aktiengesellschaft. Revenues as of March 31, 2013: 145. 62 B and EBITDA: 28. 14 B 5. Name of company ARMOUR Residential REIT, Inc. Stock/Trading symbol: ARR ARMOUR Residential REIT, Inc. (ARMOUR) is an externally-managed Maryland corporation managed by ARMOUR Residential REIT, Inc. The Company invests primarily in hybrid adjustable rate, adjustable rate and fixed rate residential mortgage backed securities (RMBS).
These securities are issued or guaranteed by a United States Government-sponsored entity (GSE), such as the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac), or are guaranteed by the Government National Mortgage Administration (Ginnie Mae) collectively, Agency Securities. From time to time, a portion of its portfolio may be invested in unsecured notes and bonds issued by United States Government-chartered entities, collectively, Agency Debt. As of December 31, 2012, Agency Securities account for 100% of its portfolio.
Direct competitors: NLY = Annaly Capital Management, Inc. , CMO = Capstead Mortgage Corp. , MFA = MFA Financial, Inc. Revenues as of March 31, 2013: 367. 627 K and EBITDA: 222. 282 K B Appendix II Stock Market Template | | Purchase Price | Number of Shares | Total | Selling Price | Total | | Dividends| Net | Investment| Symbol| Per Share| Purchased| Purchase amt| Per Share| Selling Amt| Commission| Collected| Gain/Loss| Apple Inc. | AAPL| 452. 45| 23| 10406. 35| 441. 81| 10161. 63| 20. 00| | -264. 72| Google Inc. | GOOG| 868. 09| 11| 9,548. 99| 910. 7| 10017. 70| 20. 00| | 448.
71| Amazon. com Inc| AMZN| 266. 70| 37| 9867. 90| 303. 48| 11228. 76| 20. 00| | 1340. 86| General Electric Company| GE| 23. 57| 430| 10135. 10| 24. 86| 10689. 8| 20. 00| 81. 70| 616. 4| Booz Allen Hamilton Holding Corporation| BAH| 17. 26| 579| 9993. 54| 18. 80| 10885. 2| 20. 00| | 871. 66| Lokheed Martin Corporation| LMT| 105. 96| 104| 11019. 84| 115. 65| 12027. 6| 20. 00| 119. 6| 1107. 36| ARMOUR Residential REIT, Inc. | ARR| 4. 29| 2200| 9438| 4. 54| 9988| 20. 00| | 530. 00| | QQQ| 74. 81| 687| 51394. 47| 72. 69| 49938. 03| 200. 00| | -1656. 44| Spiders| SPY| 163.
10| 306| 49908. 6| 169. 5| 51867| 200. 00| | 1758. 40| Totals| | | | 171712. 79| | 176803. 72| 540. 00| | 4752. 23| Sold AAPL on 06/09| | | | | | | Sold BAH on 06/09| | | | | | | Bought LMT on 06/11/2013| | | | | | | | | Bought SPY on 6/11| | | | | | | | | Borrowed/Sold QQQ on 6/11| | | | | | | | Bought ARMOUR Residential REIT, Inc. (ARR) on 06/23| | | | | | July 22 bought Back QQQ| | | | | | | Sold GOOGLE Inc, Amazon, GE, ARR, LMT on 07/22| | | | | | Dividend from GE . 19/share declared on 6/20| | | | | | Dividend from LMT 1. 15/share declared on 6/27| | | | | |