My Investments

This is the second and last action project of our Economics course. The purpose of this project was to make goals that we wanted to achieve in a certain amount of time and then make at least 2 different investments to reach those goals. I learned a lot about how stocks work and how to work the stock market and to actually make money. Another thing I learned was the definition of ROI, asset allocation, P/E. I am proud of my investments because I achieved my goals.

I believe in looking for trends in the market and also look for things that are new within a company that have the opportunity to grow. Also invest on small companies that have the opportunity to grow. watch the stocks everyday and if they are growing enough I will ride it out and if not I will just sell the share and invest in something else. I also believe in investing in companies that have a good reputation in the market and really have not seen big drops in stocks.

According to the Rutgers University’s Risk Tolerance Quiz. I have an above-average tolerance for risk. I am more likely to get into risky situations if my chance of success is greater than my chance of failure but enough money can tempt me into taking a big risk for a big cash reward.

I feel like all of my goals are pretty flexible but my long term goals are a lot more important to me than my short term goals. I will definitely allow for there to be shifts in my short and long term goals if necessary but as for paying of my student loans, that is my main priority. Below are my three financial goals I chose to look at for this project. 

• 1-year goal: Buy a car ($8000)

• 5-year goal: get an apartment $1,850 * 12 = $22,200 for a year -- be able to pay rent for 2 years  - $44,200 

• 25-year goal: buy a Maserati - $182,009

When choosing what to invest in, I had to reflect on my personal investment philosophies to find what companies would be best for me to invest my money in. I believe that the impact I make with my investments can ultimately shape the future and I want to make sure I make the right decisions with my money. If I were to invest in a company I want them to strive to make money cause if they make a good profit then I make a good profit. I also want them to have worker equality because if they are on the news for worker inequality then some people might shy away from shopping/working there and they may lose money. I also want my company to stay up with trends and not lose it relevance (Kodak)

I have chose to invest in Walt Disney Co, and Alphabet (Google) because they are both very successful companies and are innovative and continue to improve on themselves as a company. Even though there industries (entertainment and technology) are very different they have shown to be the lead in terms of the most innovative ideas and products. I feel like these are the companies of the future because Disney shapes the minds of the young and Alphabet (Google) is in my opinion the most innovative company out there as of today. Let me tell you more about my chosen companies.

Walt Disney Co. - Walt Disney Co is unmatched when it comes to the scope of entertainment, with shares in animation, television, film, theme park, and merchandising industries and is guaranteed to grow. Disney also has a P/E ratio of 22.4 compared to an entertainment average of over 100. They do offer dividends, recently $0.66/share. Also Disney is releasing 6+ Star Wars movies. I feel that Disney will do great with this movie just as they have done for many other movies and they will make a huge profit over the years and will hopefully continue to make profit.

I see Alphabet (Google) as one of the most innovative and up to date internet company out there today. I feel like Google is not only staying up to date with what's going on today but they are crafting the future. Google’s parent corporation, Alphabet, has an P/E of 34.86, compared to the industry average of 20.41, Which is not very good at the moment. I feel that Google has many more better years ahead and I am willing to stick with it. Google does not pay dividends to its shareholders.

Portfolio I - 1 year goal

invest 10,000-> ROI of $3,000
Google - ROI 21.9% - $1,980.20 - 2.82 stocks
Disney - ROI 32.1% - $8,019.80 - 70.92 stocks

Portfolio II - 5 year goal

Invest $22,100 --> ROI of $44,200 - ROI of 200%
Google - ROI 57.1% - $1267.44 - 1.8 stocks
Disney - ROI 208.7 - $20,832.56 - 184.23 stocks 

Portfolio III - 25 year goal

Invest $18,456.08 --> ROI $182,009 -->ROI 986%
Google - ROI 858.9% - $18,368.07 - 26.1 stocks
Disney - ROI 27,965.7% - $88.01 - .78 stocks

Stock sector is the industry that a corporation is in such as entertainment, internet, healthcare, energy, utilities and telecommunications. Walt Disney Co is in the entertainment business which means they deal with movies shows and making people entertained. Alphabet (Google) is in the Internet sector and basically that means anything that is online. I have invested in the two industries that I know will constantly be in demand.

The reason I chose to invest in two different stock sectors is because if one year the stocks aren't doing good in the internet sectors then I will still have the entertainment sector to fall back on till the internet rises again.

some assumptions I have made for the purposes of this project were.

1. One assumption I made is that Disney’s P/E will go up due to the 6+ Star Wars movies that are coming out.
2. Google is not doing very well right now but I have high expectations that their stocks will rise.
3. I also overall we have assumed that our plans for the future will stay the same and everything will work out exactly how we want it to

Citations

"Google." Google. N.p., n.d. Web. 25 Oct. 2015.

"Maserati." Maserati. N.p., n.d. Web. 25 Oct. 2015.

Investopedia Staff. "Stocks Basics: Different Types Of Stocks."Investopedia. N.p., n.d. Web. 25 Oct. 2015.

"Google." Google. Google Finance - Yahoo Finance - MSN Money, n.d. Web. 25 Oct. 2015.