Question

GSSC 1027 Winter 2019 Assignment #1: Investing

For this assignment, assume that you have $10,000 to invest. Using the internet, newspapers, investing chapter presentation materials or other sources for information, select at least 2 investments, starting on any date between Jan 21 – Feb 1. You may pick any investment instruments you wish including GICs, stocks (equities), bonds, mutual funds, gold, foreign exchange futures, keeping the funds under your mattress, or any other legitimate investment as long as there are at least *TWO* different types. In other words, don’t pick 2 stocks, 2 mutual funds, or 2 GICs. If you wish, you may also “buy” and “sell” during the period to change what investments you hold, but if you do, assume a $10 transaction fee and include the detail. This is a learning exercise, so grading is based on what you think happened and what you learned. You are *NOT* being graded on whether your investments made or lost money, rather on what you learned in the process. The assignment is worth 15% of your course mark, so invest you time accordingly.

The assignment is in two parts:

First part is your starting position. Hand in on paper (one-page maximum, less is more) in the February 5 or 6 class:
1. What is your investing objective?
2. List your original investments, amount and date “bought”, and your reasons as to why each was chosen.

Second part is your ending position. Also hand in on paper (one page maximum please) in the April 2 or 3 class:
Re-print the first part and add to it the following:
3. Value of investments on March 25.
4. How did your investments perform against your expectations and why do you think that happened?
5. With what you’ve seen and learned in class, what investment strategy would you use in the future? Include your earlier answers to questions 1 and 2.

As a rough example (feel free to use a better or more appropriate format):
1. My investing objective is ... (include more than : “to make money” – discuss risk, why you chose the instruments you did, etc)
2. Starting Investments

Investment	Date “bought”	Amount “bought”	Why Chosen
Stock ABC	Feb 12	$5000 (400 shares @ 12.50)	Industry sector is due for a big gain because (insert good reason)...
Bond XYZ	Feb 12	$2500 (50 @ 50)	Should have big gain as Company ready to (insert your rationale)...
Gold	Feb 12	$2500 (2 oz @ 1250)	Should have big gain because (insert your rationale)...

3. Investments at end of period

Investment	Value on Apr 9	Performance (end - start)	What caused the change in value?
Stock ABC	$4900	-$100 (share value 12.25)	Explain what you think happened: e.g. Stock market went down (why?); industry sector earning below projections (why?)
Bond XYZ	$2505	+$5 (bond sell value 50.10)	Didn’t lose, but not the gain expected because of (insert why you think it happened) ...
Gold	$2508	+$8 (1254/oz)	Slight gain but not as expected because (insert why you think it happened)...
Gain / Loss		-$87

4. My first investment gained/lost because of ... The second...

5. When I started, my strategy was to (discuss strategy and risks).... What I would do differently next time is ... and this is why: ...

Answer 1

1. my investing objective is to maximize returns with lesser risk and in lesser time period. of course it carries some risk, but I need to balance the risk in all dimensions.

2. stock ABC provided loss of $100, may be the market went down due to many reasons and at the same time the industry also carries similar down trends.

Bond XYZ provided good returns

Gold provided good returns from the investment