Investment Planning

Investment Planning

I use one year and ten months to save the first $100,000. Then, I buy one shock that is Lenovo Group (00992.HK). I choose it because the company had great strategy and good performance of last few years from news. The company also invests more money to improve and enhance its technologies. For example, Lenovo Group has just established a global strategic partnership with Juniper Networks to develop network equipment business. It can be effective to enhance its products and expand the business, such as more classes of clients, more types of electronic products and so on.

In same kind of 50 constituent stocks in Hang Seng Index in Hong Kong, I choose Tencent (00700.HK) to compare with Lenovo Group (00992.HK). (Figuare4) In price, Lenovo Group is cheaper than Tencent. Lenovo Group’s EPS is lower than Tencent’s, but Lenovo Group’s P/E ratio is better than Tencent’s. After comparison with all data of two stocks, I consider Lenovo Group’s financial strength and type of the industry of company under fundamental analysis. It can be good for its further development and future performance of service and products based on new technological products and overseas market. More people desire new technological electronic products around the world. The market demands more different kinds of electronic products. It is good for Lenovo Group for the increasing stock’s price in the future. Based on the assumption, the stock price movements are purely random. It also is a risk to be careful. Its current market price reflects true value. And it is impossible for an investor to outperform that average for the stock market as a whole over a period of time.

Therefore, I set the selling price at $10-$14 for three to five years because I think the economy is not fully recovered and the future expanded business will not perform in the report now. It will be a long period investment. During the period, I will consider world economy, the news and performance of Lenovo Group, the development of technology and so on. If any information affects the company’s future business, I will evacuate and evaluate the selling price to change my option.

The second saving of $100,000 is for the investment of bond. I choose two bonds for comparison (Figuare5), one is HSBC Holdings PLC and one is Australia Commonwealth of (Government). Australia Commonwealth of (Government) is better than HSBC Holdings PLC. It is because the Australia Commonwealth of (Government)’s coupon rate is higher than HSBC Holdings PLC’s under the same of coupon type (Fixed (Semi-Annual)) and the Australia Commonwealth of (Government)’s product risk level is lower than HSBC Holdings PLC’s. But I must consider the risk. The risk is the currency because HSBC Holdings PLC is used the United States Dollar (USD) and Australia Commonwealth of (Government) is used the Australian Dollar (AUD).