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Investment Model: This is an individual project on developing each student’s own investment model using all and any necessary information such as accounting information, market information, industry information, national or global economic information, etc..

double space, times new roman, 12 size, 1 inch margin，11 pages

Personal Investment Model

1. Set financial goals such as financial independence, support for child education,

   1. Assess current financial position and compare it with financial position when goals will be achieved.

2. How to achieve the goals:

   1. Active earnings through works:

      1. Career plan

      2. Savings plan

   2. Passive earning through investment:

      1. Investment vehicles: securities, Real estates, others

      2. Risk attitude

         1. Lifetime attitude

         2. Stage by stage attitude

3. Analyses for

   1. Stock investment

   2. Real estate investment

Analyses for stock investment

1. Market Analysis

   1. Cross sectional

   2. Time serial

1. Industry Analysis

   1. Cross sectional

   2. Time serial

1. Company analysis

   1. Cross sectional

      1. Profit analyses:

         1. Profitability ratios: ROA, ROE, ROCE, EARNINGS/SALES, Cash flow/TA.

         2. Activity: inventory turnover, asset turnover

      2. Risk analyses: liquidity w/ cash position, solvency, credit.

      3. Select the best:

         1. Creating composite indices using results from 3-a, 3-b, other s.

         2. Establish selection process:

            1. Aggressive approach:

               1. Consider Profit measure first (more)

               2. Then (than) risk measure.

            2. Conservative approach:

               1. Consider risk measure first (more)

               2. Then (than) risk measure.

         3. Using valuation models.

            1. Choose the most under- valued item which has the largest gap between the intrinsic value from the model and the current market value.

            2. Examples:

               1. Present value:

                  1. Cash flow based.

                  2. Earnings based.

                  3. Dividend based.

               2. CAPM for expected return: Ri = Rf +βi (E(Rm) - Rf ) +εi

         4. Using P/E and BV/MV.

1. 1. Time serial

      1. Growing vs. shrinking in value.

Analyses for real estate investment

1. Industry Analysis (national)

   1. Cross sectional

   2. Time serial

1. Local market Analysis (Southern California)

   1. Cross sectional

   2. Time serial

1. Pocket market Analysis (City of San Bernardino)

   1. Cross sectional

   2. Time serial

1. property analysis

   1. Profit analyses:

      1. Profitability ratios: cash to cash ratio, CAP ratio (ROI)

   2. Risk analyses: solvency, credit.

   3. Growth potential

   4. Select the best:

      1. Creating composite indices using results from 4-a, b, & c.

      2. Establish selection process:

         1. Aggressive approach:

            1. Consider Profit measure first (more)

            2. Then (than) risk measure.

         2. Conservative approach:

            1. Consider risk measure first (more)

            2. Then (than) risk measure.

         3. Using valuation models.

            1. Choose the most under- valued item which has the largest gap between the intrinsic value from the model and the current market value.

            2. Examples:

               1. Present value:

                  1. Cash flow based.

                  2. Earnings based.