Stock Track Report
My initial strategy for my portfolio was to research online news articles about stocks that
are expected to rise in price. Because I had little knowledge about investing, I decided it was
important to know what professionals thought about each potential company I wanted to invest
in. One of the main websites I used was MSN money. They had multiple articles about “hot
stocks” and companies that are on the rise. For example, one of the companies I chose to invest
in was Tesla Motors Inc. I knew that this company was fairly new, and produced luxury electric
cars. I read an article about Tesla being a fast growing company, and to me that meant that the
stock prices were going to increase. For a while, this was the company that kept my portfolio
alive. It was producing returns of about 7% when I first invested in it.
Another factor I considered when investing was the amount of risk associated with each
investment. I knew that the more risk there was, the higher the return could be. Personally, I am
not a fan of risk so I made sure to invest in companies that seemed like they would have
consistent returns. One way of measuring risk is to look at the beta of the company. Most of the
companies that were left in my portfolio have a beta close to 1, which means they are almost as
risky as the market itself.
Another factor I kept in mind while investing was diversification. I knew that it was
important to invest in stocks in different industries. I didn’t want to have many stocks that were
in the same industry because I knew that this would increase the riskiness of my portfolio. I
invested in stocks in an array of sectors, which included the services sector, the financial sector,
consumer goods sector and a few others.

 

 
Company Name

Sector

Amount
Invested
$149.80

Orthofix International
N.V. (OFIX)

Healthcare

Vermillion Energy Inc.
(VET)

Basic
Materials

5.31%

I read online that this would be a good
stock to invest in.

$313.45

2.36%

Wells Fargo & Company Financial
(WFC)
Rose Rock Midstream,
Basic
L.P. (RRMS)
Materials

$9,686.00

-0.72%

$207.50

-1.78%

Chipotle Mexican Grill,
Inc. (CMG)

Services

$11,022.00

-2.95%

Tesla Motors Inc.
(TSLA)

Consumer
Goods

$3,150.75

-2.99%

Southwest Airlines Co.
(LUV)

Services

$119.55

-4.85%

Nike, Inc. (NKE)

Consumer
Goods

$229.20

-6.74%

$563.70

-7.65%

$370.00

-10.78%

I wanted to diversify my portfolio and
include basic materials in the list of
sectors within my portfolio. Also it was
on Barchart.com.
I read in an article online that Well’s
Fargo was a stock to watch.
This stock was on a steady increase in
price, and I read on Barchart.com that
this was good a stock to purchase now.
I enjoy eating at Chipotle and it seemed
like the company was doing well and
wasn’t on a decline.
I read on MSN money that this
company was a fast growing company.
This company produces luxury electric
cars therefore it has the potential to
produce high returns.
I read in an article that there would be
expected price increase in the stock.
Therefore I purchased it hoping it would
generate a return.
This company has been at a constant
growth for many years, and I thought it
would be a safe investment.
This stock as in an article about stocks
to look out for.
For the most part, this company has
been steadily growing. I also read a
news article about this being a good
stock to invest in

Dick’s Sporting Goods
Services
Inc. (DKS)
RCS Capital Corporation Financial
(RCAP)

% Return

Reason for Inclusion

 
Because of my lack of knowledge about investing when I began this project, my
portfolio’s performance wasn’t the best. I relied a lot on news articles and outside sources in
making decisions about which stocks to buy. The final value of my portfolio is $98,075.98,
making my overall return -1.92%. Although I did not have a positive overall return, I did not
lose a significant amount of money. Considering I started with $100,000, I only incurred a loss
of $1,924.02.

Portfolio  Diversi-ication  
0.58%  

2.02%  

13.09%  
Healthcare  
Basic  Materials  
38.96%  
45.35%  

Financial  
Services  
Consumer  Goods  

My portfolio was a little less risky than the market. The beta of my portfolio was 0.90. In
comparison to the beta of the market, which is 1, my portfolio was almost as risky as the market
itself. The reason for this may be because all of the stocks in my portfolio have betas close to 1.
My required rate of return on my portfolio is 7.27%. I calculated this by multiplying the market
risk premium by my portfolios beta, and then adding the risk free rate.
My strategy did not end up being very successful because I relied on news articles for
information about “hot stocks”. I should have looked into each stock more carefully, instead of
acting on impulse and investing in stocks I wasn’t familiar with. Although Tesla Motors didn’t
provide a positive return in the end, it was the one of the only stock that I looked into closely and
it had a positive return for the most part, until the end of the trading period. I think my downfall
was that I didn’t take enough risks. The more risks I could have taken, the higher my possible
return would have been. I learned that “playing it safe” doesn’t always result in a positive return.