Throughout the course of the semester, each student was allotted with a set of preset stocks in their portfolios; I had stocks in the Financial Industry. In the process of diversifying my portfolio, I chose to invest in high risk funds, increasing my risk but also my potential for gains. By monitoring the sequences in “Roger’s Blog” and the external influences I was able to monitor the outcome of my nine stocks each week.
Stock Market Game Portfolio
Name of Stock Starting Price Final Price Dividend Yields
Bank of the West Lands 14.12$ 15.58$ 9.37% Increase in price
International Lenders Association 9.30$ 8.77$ -6.04% Decrease in Price
Farmers Insurance Incorporated 13.71$ 12.33$ -11.19% Decrease in Price
South East Asia Financial Group 9.17$ 8.68$ -5.65% Decrease in Price
Industrial Leasing Inc. 28.15$ 30.12$ 6.54% Increase in Price
Asia Telecomm Corporation 29.67$ 29.89$ 0.74% Increase in Price
Global Defense Contractors 84.3$ 75.98$ -10.95% Decrease in Price
Juniper Pharmaceutical 52.98$ 53.67$ 1.29% Increase in Price
ETF Global Energy 51.89$ 51.9$ 0.02% Increase in Price
Bank of the West Lands
Bank of the West Lands is the first stock I invested in. For a portfolio in the Financial Industry, it is important to invest in the Banks as it presents a relatively safe investment. “As of late, the banks have been doing very well with their quarterly returns” (Rogers Blog, 2013). Many factors had come into play with this stock mainly that of the interest rates increase and the issue of the company cutting 2500 jobs (Roger’s Blog 2013), which would have potentially cause a decrease in the stock value. An article in the Economist published on July 20th 2013, states that there will be new developments in the banking industry for cloud-based services. “This increase should lower barriers to entry and it should also enable big banks to become more cost-efficient”(The Economist 2013).Throughout the course of the semester, the Bank of the West Land has yielded a dividend of 9.37% increase, which I believe has to do with the future changes for banks everywhere – Cloud Banking.
International Lenders Association
When I invested in the International Lenders Association, I carefully analyzed this stock as I did for the Bank of the West Lands. With the current situation with companies cutting jobs, investing in Financial Stocks is proven to be risky. The International Lenders Association cut 6,000 jobs in order to reduce their overall costs (Roger’s Blog 2013). This stock has a dividend yield of -6.04% which has proven that much like many of the investments in a Financial Portfolio to entail a risk given the economic times. I have taken that into consideration when investing; I wanted my portfolio to present a more aggressive approach.
Farmers Insurance Incorporated
Insurance companies are a multibillion dollar industry. Farmers Insurance Incorporated insures the farmers who are essentially the back bone of our food industry. Farming is a consumer staple as it provides companies with the resources to manufacture our food products. Although this would seem to present many benefits, the Insurance companies in this case are extremely weighted on environmental factors. “Farmers Insurance has taken a hit with the number of claims, which have increased by 45% due to the heat and drought this summer.”(Roger’s Blog 2013). Normally, this would be a relatively safe stock to invest in, however due to the number of claims, this caused the dividend to yield a -11.19% return.
South East Asia Financial Group
Industrial Leasing Inc.
Asia Telecomm Corporation
Global Defense Contractors
It can always be good to invest in a defense stock although it does present a certain risk to a diversified portfolio. This industry strives on wars and defense which are essential to seeing a rise in this particular kind of stock. It can be a very lucrative stock to invest in, however, not when involved with controversy. “War is good for a few, especially small arms which are easy to move and cheap to purchase. Global Defense contractors has been identified as a possible supplier of arms to war torn areas, the company has denied any direct affiliations to any illegal sale of arms (Rogers Blog 2013)”. This controversy has caused the company to lose contracts notably that of the UN peace keepers. The current buzz surrounding this stock will naturally cause a decrease in the stock’s value. The stock has yielded a negative dividend of -10.95%.
Juniper Pharmaceutical
I chose to invest in stocks in the pharmaceutical industry to diversify my portfolio from the Financial Sector. Pharmaceuticals are a relatively safe stock to invest in, and as a rule of thumb every portfolio should have a certain amount of pharmaceuticals in order to remain more conservative as they present a low risk with potential for high returns as the population continues to age. At the beginning of the semester, the Juniper Pharmaceutical Company had trouble meeting certain expectations. This caused a slight decrease in the stock, however, the company then teamed up with the Snuffer Tobacco company, teaming up to produce a new vaccine (Roger’s Blog 2013). The Juniper Pharmaceutical has a dividend yield of 1.29%, a relatively conservative increasing balancing out my risky portfolio choices.
EFT Global Energy
I chose to invest in EFT Global Energy it allows for my portfolio to be strategically diversified. As populations continue to increase across the world, the price and demand for natural commodities will only continue to increase. “Global consumption of primary energy has grown by 30% over the past decade. But almost all of that growth has come outside the rich world (The Economist 2013).” The demand for natural gases and natural commodities will never dissipate as it is essential to sustain human life. Though this stock has a dividend yield of 0.02% it does not mean that it is a “bad” stock. I have taken this into consideration when investing into this company, but it presents a lower risk than other stocks in my portfolio, this staying in line with my diversified portfolio strategy.
Bibliography
Bank of the West Lands
Kambayashi, S. (2013, July 20th). Silver Linings. The Economist. Retrieved July 29th, 2013, from
www.economist.com EFT Global Energy
World Primary-Energy Demands. (2013, June 13th). The Economist. Retrieved July 20, 2013, from
www.economist.com
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