Case Studies in Finance: Creating a Diversified Portfolio with Technical Analysis

Running head: CASE STUDIES IN FINANCE
Case Studies in Finance
Name of the Student:
Name of the University:
Authors Note:

CASE STUDIES IN FINANCE
1
Table of Contents
Introduction:...............................................................................................................................2
Understanding the philosophy and strategy behind the creation of the Portfolio:.....................2
Recommendation for the investment in portfolio:.....................................................................3
Conclusion:................................................................................................................................6
Reference and Bibliography:......................................................................................................7

CASE STUDIES IN FINANCE
2
Introduction:
The assessment aims in preparing an adequate portfolio, which could have the
audacity to increase returns while reduce any kind of risk that is lured from capital market.
The portfolio has been created with a certain philosophy of generating higher returns from
investment with the help of technical analysis, while discarding any kind of external threats
which could hinder its progress. The use of adequate technical analysis method has helped in
drafting the portfolio which could sustain volatility in the stock market and improve the
investment capital. The portfolio consists of equity shares, short selling, future contract, ETF
and LIC, which adequately diversifies the portfolio created for investment.
Understanding the philosophy and strategy behind the creation of the Portfolio:
The investment philosophy mainly revolves around the Australian equities which are
listed in small cap. The incremental growth that is seen in Australian equities during the past
year has incited investors to increase their exposure in the sector for raising the level of
returns from investment. Furthermore, the mining industry in Australia has been flourishing
during the past one year, which can be considered and adequate investment opportunity for
all the investors. Therefore, investments in the sector would eventually generate higher
returns and have low risk from investment. The investment philosophy also instigates to use
adequate hedging procedures that could minimise the portfolio risk and allow the investor to
maximize its return. The exposure in ETF, LIC and Short selling also increases the level of
diversity that is needed to formulate the portfolio. Hence, the major investment philosophy
that is used for creating the portfolio is to select stocks, which have higher growth and return
generation capability. Moreover, the technical analysis strategy has been used for creating the
portfolio, where the short-term trend of the stocks is evaluated to detect the investment
opportunity that could be utilised for investment purposes. According to Ahmad et al. (2017),