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Investment & Portfolio Management

Analysis and Evaluation of International Investments

International investment is a prudent part of any investment portfolio. International investment helps to diversify the investment portfolio. Although, international investments are beneficial, they are not risk free. In addition, international investors should be ready with some long-term plans spread over a period of 5 to 10 years in order to decrease the risk of loss due to a slump in markets.

To complete Module 5 SLP, please read the information in the background material, look for more information, and then respond to the following tasks:

1) For this module, choose one of the AMEX International Indexes [] to invest some of your imaginary money in. Look under exchange traded funds (ETFS) for information about their international indices. Report what index (or indexes) you chose, and why. Also report how much you chose to invest, and why. You are required to invest at least $120,000 in these indexes. You obtain the money by selling some of the securities that are currently held in your portfolio. Assume that you sell the securities at their present market prices.

2) Provide a table showing the present composition of your portfolio after the purchase of the international fund, and the present market value of this portfolio.

3) Comment on the performance of your investments during this course session. Remember to consider the market value of the portfolio as of the date on which you prepare the report.

As this is the final part of the session long project, you are now required to review your investment performance during this session.

Solution Preview

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Portfolio Analysis:

There are four top NYSE Euronext Indexes Dynamic Market Intellidex (DYI), NYSE 20 + Treasury bond (AXTWEN), NYSE Arca Gold Miners (GDM), and Strata Quant Materials (STRQMT). I choose two indexes Dynamic Market Intellidex Index and Strata Quant Materials. The main reason for choosing these indexes are its growth rate in past few months and years.

See attachment for graph 1.

If we look at the graph above we can see that DYI has shown a uptrend in its daily return from past few years and this is the reason it can be a best index for investment.

See attachment for graph 2.

As far as STRQMT is concerned the trend shows that this index has an uptrend from past few years and therefore it looks attractive for investment.

See attachment for graph 3.

GDM has a decline trend from past few weeks and it is expected that the value of the index would go down in near future. Therefore Its not wise to invest in this stock for short term.

See attachment for graph 4.

Similarly AXTWEN is almost constant growth index but in past few weeks ...

Solution Summary

The solution discusses the investment and portfolio management.