Project Synopsis - Portfolio Management

For the Portfolio Management Project, I chose companies from Financial, Energy, Conglomerates, Technology, and Capital Goods Sector. I believed that a mix of companies ranging from different sectors would ensure future growth prospects along with minimizing risks. The companies that I picked to make my portfolio are among the largest corporations within their sector or a very well known company.

In the Financial Sector, my portfolio consisted of Citigroup Inc, Bank of America Corporation, and HSBC Holdings. I used Exxon Mobil Corporation and Chevron Corporation for Energy Sector; For Conglomerates Sector I picked General Electric Company and Raytheon Company, while for Capital Goods I picked Boeing Company. The Technology Sector part of my portfolio consisted of Microsoft Corporation, Hewlett-Packard Company, and Wipro Limited.

I picked Boeing and Raytheon because they are defense companies; as such I felt they would be less prone to volatilities of day-to-day market. HSBC Holdings and Wipro Limited are two foreign companies that I picked that were listed in NYSE. I picked Wipro Limited because it is a very well know Indian Technology Company, and with Indian economy expanding at a rapid pace, I felt investing in the company's stock would provide considerable gain in the future. As HSBC Holdings on the other hand, is one of the biggest companies within Financial Sector, therefore I picked the stock.

For the Mutual Fund, I picked Fidelity Puritan. Fidelity Puritan is a mutual fund that seeks income and capital growth consistent with reasonable risk. The fund invests 60% of assets in stocks and other equity securities and the remainder in bonds and other debt securities, including lower-quality debt securities, when its outlook is neutral. It invests at least 25% of total assets in fixed-income senior securities (including debt securities and preferred stock). The fund also invests in domestic and foreign issuers and invests in Fidelity's central funds.

At the beginning of the project, I spent $351,465 on the Stock Market. The price includes transaction fees. The rest of the money was used for T-Bills and Bonds.

At the end of the first week, my portfolio dropped to $396960.58. Exxon Mobil Corporation was the only company in my portfolio that had a considerable rise in its stock value. All other stocks except Wipro and Hewlett-Packard Company lost their values. My portfolio stood at a negative return of 0.7% at the end of first week.

At the end of second week, my portfolio saw a significant rise in value, and stood at $405590.58- a 2.17% gain over the last week. All the stocks provided positive returns except Microsoft. Boeing Company rose the most significant, from $85.50 to $90.72.

At the end of third week, my stocks saw significant decline in their market value, with my portfolio falling as much as 1.52%. This fall erased all the gains I made since last week. My portfolio stood at $399425.58, which was less than what I started out with.

At the end of fourth week, my stocks recovered, and my portfolio moved up by 1.1%. Major gainers since last week included Boeing, Hewlett-Packard Company and Wipro Limited. My portfolio at the end of the week stood at $403850.58.

The end of 5th week saw my portfolio decline again, this time buy 1.52%. The fall in stock prices erased all the gains I made last week. All of the stocks in my portfolio saw their values drop. My portfolio stood at $397705.58.

At the end of 6th week, my portfolio saw further loss. My portfolio fell a record 4.33%, and stood at $380460.58. Ever since, I started portfolio management, my portfolio lost 4.86% in its value.

From the start of the project, S&P 500 Index fell 3.4% while Fidelity Puritan, the portfolio I am supposed to compare against fell 1.2%. Both the market and the Mutual Fund provided less loss than my portfolio.

I would like to mention that, if there hadn't been a Market Slump in the past few weeks, my portfolio might have performed a lot better. As most stocks took heavy beatings, due to the fall in stock market, my portfolio got severely hit and thus provided negative returns.

On a note, I used market closing prices of the stocks on Monday to calculate the value of my portfolio. As Wall Street Journal reports the previous day's market closings - I reasoned it would be a better option to use Yahoo or Google Finance. I double-checked the closing prices of Wall Street and Yahoo Finance to make sure they were the same.

SEC Filings | Nike Stock

Dow Futures - This article goes over basic information about one of the most popular indexes.