Investment Planning   THE PROJECT   Let’s Get Invested     The project for this semester is about putting a portfolio together. The portfolio will be based...

Investment Planning

THE PROJECT

Let’s Get Invested

The project for this semester is about putting a portfolio together. The portfolio will be based on:

• • Asset allocation
  • Beta/Standard Deviation
  • Valuations
  • Return

To make this project about performance only would encourage gambling in the stock and bond markets and that is not what we are here to do. We are here to make fundamentally sound investments with the tools we have in this course.

Therefore, please put a portfolio together of any investments you would like using different types of mutual funds; large cap, mid cap and small cap, growth and/or value, international, domestic, emerging markets.

Bonds; investment grade, high yield or emerging market. I recommend mutual funds as the risk analytics are easier to find.

Any asset allocation you want and explain why you like the allocation. Illustrate a 3, 5, 7 and 10 year performance of the portfolio with the beta and standard deviation. We are looking at risk adjusted returns. Clearly making 10% is better than making 8% but taking on twice the beta or standard deviation to make the 10% may not be better.

This is to get you familiar with what you may be asked to do for a client. Let’s practice here so you are prepared when someone is going to pay you a fee to put their money at risk.