Stock-Trak Debrief

Stock-Trak Debrief

When I started my venture with Stock-Trak I had some realistic goals with respect to the economy and the goals of the investor I was working with. For the most part, I was looking for investments with steady growth and income stream. I believe those goals were met. Initially I had concerns on how to invest the 1 million dollars to fulfill the risk and return of my client. After studying the market, large capitalization stock seemed to be the way to go with diversification in mutual funds and some bonds. This would fulfill the amount of risk my client was willing to take with the return he was looking forward to over the long term.

For the bulk of my portfolio I decided to buy stocks of well-established companies, a mutual fund, bond fund and a corporate bond. Although I dabbled slightly in the futures market, this was not an investment for my sponsor. My initial investments were about 67% in stocks, spread over nine different companies; five of these companies being in the technology sector. Most large capitalization companies such as Apple, IBM, Alibaba, Microsoft and one small capitalization company, Violin Memory Inc. The other four companies stocks I chose were all large capitalization stocks in different sectors of business. Exxon Mobil corporation, one of the largest oil and natural gas producers in the world; Raytheon Company is a large capitalization Aerospace/Defense products and service supplier for the government. Amgen inc. is a Biotechnology company with many drugs on the market in the area of cancer treatment. The last is the Entertainment juggernaut known as Disney. To round out my portfolio I had 8.1% of JP Morgan Chase & Company. 6.4% May 2038 bonds. I also had 7.5% of the Fidelity Capital and Income (FAGIX) mutual fund and about 8% of Vanguard long-term Treasury Bond Fund (VUSUX).

Most of the stocks performed as expected. Microsoft however exceeded my expectations. At one point it was up nearly 12% in the short time I owned it. For awhile, Violin Memory exceeded my expectations as well. However, in the last week it took a deep turn downwards and fell hard. Vanguard’s long-term Treasury fund also fell unexpectedly; interest rates have not risen in some time so the fund should have stayed even. I dabbled in the futures market shoring oil futures. These positions are highly leveraged and were far too risky for the objective of this portfolio. However, when I invested in the market and economic signs seemed to lead me to believe that oil prices would fall. More often than not my assumptions were wrong, leading me to abandon this form of investing for something less risky.

As I write this paper it is the last day of trading and it was a down day. The portfolio finished down .12%. Unlike last week, were the portfolio was up over 13%. Due to the time constraint of this assignment, my portfolio was down,