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Investment & Portfolio Management: Using Mutual Fund Investment Strategies

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One way to diversify your portfolio is to invest in the mutual funds. A mutual fund is a professionally managed type of collective investment that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.

Go surf the web and choose one to three mutual funds (stock funds only) to buy into with some of your imaginary $894,000. You should invest at least $100,000 in mutual funds. In order to get the necessary money to buy mutual funds you might want to sell some of the securities in your portfolio. You must do so at the market price at the closing day of your imaginary transactions.

1) Which mutual fund or funds did you choose, and why? Please include a discussion about your choice of active or passive funds.
2) How much did you spend, including transaction fees?
3) Prepare and display a table showing the development of your initial $894,000 portfolio starting from Module 1 to its position at the end of Module 3.
4) Based on your analysis and findings, what would you recommend to other investors? Would you recommend the mutual funds that you chose to other investors? Why?

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Solution Summary

The solution discusses using mutual fund investment strategies in the investment and portfolio management.

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Answer:
1) Which mutual fund or funds did you choose, and why? Please include a discussion about your choice of active or passive funds.

I choose passive mutual funds because in the current market its better to invest on exchange traded funds than investing on a risky active mutual funds managed by an individual fund manager.
The funds that I choose are:
(i) ProShares UltraShort Silver ...

Solution provided by:
Jayant Kumar, MBA
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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