Reflection

Dong Qiuchen

1409767

Portfolio Management Individual Learning Journal

In the first component of this project where each group was tasked to construct an Investment Policy Statement, our group divided the work among ourselves so as to increase efficiency. Every member of the group contributed by completing our individual sections. For me, I was assigned to write the purpose of the IPS. Afterwards, we met up as a group to combine the sections into a full report and discuss on the weightage of each asset classes as well as the specific assets that we consider investing in.

First of all, we decided to invest in the various asset classes namely stocks, bonds and REITS in order to diversify the portfolio. Next, we narrowed our investment to the companies in certain industries that we think are suitable for the portfolio. We did this by analysing the risks and possible returns of that company. During the discussion, we used several graphical and statistical tools to analyse the historical performance of the company and gauge its future prospects. For instance, we refered to the historical price chart and ratios like Price to Earning Ratio and Earning Per Share to determine if the stock’s performance would meet our target return. On top of that, we have to choose stocks that are of lower risk as our client is considered to have low risk tolerance. It was a tough decision to make as every one of us have our own investment ideas given the wide variety of assets to choose from. In the end, we incorporated every one’s idea by selecting the better ones to invest in.

Throughout the trading period, every group member was concerned about the performance of our portfolio. We constantly check the trading price of the stocks and REITS to find the best time to sell them off so as to generate the maximum amount of profit. However, the prices of assets were fluctuating during those weeks and we find it difficult to catch the perfect opportunity to sell. After approval from all group...