Financial Planning: Portfolio Analysis and Recommendations

Running Head: Financial Planning
1
Project Report: Financial Planning

Financial Planning
2
Contents
Introduction.......................................................................................................................3
Stock and mutual fund......................................................................................................3
Investment level................................................................................................................6
Portfolio............................................................................................................................6
Risk and return..................................................................................................................8
Recommendation and conclusion.....................................................................................9
References.......................................................................................................................11
Appendix.........................................................................................................................12

Financial Planning
3
Introduction:
Portfolio is a group of various financial assets such as bonds, stocks, currencies,
commodities, mutual funds and cash equivalents. An investment portfolio is like a pie which
is divided into various pieces of different sizes which represents about the different assets
classes and the types of investment in order to accomplish the appropriate risk and return
portfolio (Palicka, 2011). While preparing a portfolio, the main point which must be
considered by the financial advisor is the risk bearing capability of the individual. A portfolio
must be prepared by the financial advisor through evaluating the main goal of individual
behind investing in the portfolio. If the portfolio is prepared by the individual for long term
purpose then the risk level must be lower as well as if the investment is for short term then
the risk and return both the level must be higher.
In this research paper of portfolio, 5 stocks and mutual funds have taken into the
concern to conduct the study i.e. Apple Inc, Amazon, Coca cola, McDonald and investor
mutual of Canada series Tu-NL. A portfolio calculation has done over these stocks and
mutual fund to calculate the total risk and return from this portfolio so that it could be
concluded whether the portfolio is better opportunity to invest or few changes into the stock
and mutual fund are required to improve the performance of overall portfolio of the company.
Stock and mutual fund:
In this research paper of portfolio, 5 stocks and mutual funds have taken into the
concern to conduct the study i.e. Apple Inc, Amazon, Coca cola, McDonald and investor
mutual of Canada series Tu-NL. Details of this portfolio and the stocks are as follows:
Apple: -
Apple is one of the largest multinational companies worldwide and its annual revenue
totalled $265 billion for the 2018 fiscal year. The Company's products and services include
iPhone, iPad, Mac, iPod, Apple TV and many more. Huge amount of money would be spent
on this company because its share or stock marketing will never let down in future due to the
fact that there is huge demand of Apple’s products and service worldwide. Further, the
company owns large cap. The associated risk and return of the company has been calculated
and it has been found that the associated return of the company is 2.22% whereas the beta of
the company is 0.51% which depicts that the associated risk of the company is quite lower
than the total return earned from the company. Hence, this company is a better option for the
portfolio. The total invested amount in the company is 30% of total invested amount
(Madura, 2014).
S&P10
0 Apple
Mean 0.51% 2.22%
Variance 0.02% 0.51%
Standard
Deviation 0.014 0.071
Covariance 0.000%
Beta -0.0204
(The global mail, 2019)

Financial Planning
4
Amazon:
Amazon is the world second largest company which engages in the retail sale of
consumer products globally and It also manufacture and sell electronic devices, including
kindle e-readers, fire tablets, fire TVs, and echo; and provides Kindle Direct Publishing, an
online service that allows independent authors and publishers to make their books available
in the Kindle Store. Further, the company owns large cap. The associated risk and return of
the company has been calculated and found that the associated return of the company is
2.84% whereas the beta of the company is 0.67% which depicts that the associated risk of the
company is quite lower than the total return earned from the company. Hence, this company
is a better option for the portfolio (Phillips & Stawarski, 2016). The total invested amount in
the company is 30% of total invested amount.
S&P100 Amazon
Mean 0.51% 2.84%
Variance 0.02% 0.67%
Standard
Deviation 0.014 0.082
Covariance 0.193%
Beta 0.3791
(The global mail, 2019)
Coca-Cola Company:
The Coca-Cola Company is the world's largest total beverage company, At Coca-
Cola; they are serious about making positive contribution in the world. This starts with
reducing sugar in drinks and bringing new and different drinks to people everywhere. It also
means continuously working to reduce environmental impact, creating rewarding careers for
associates, and bringing economic opportunity wherever they operate.
Further, the company owns large cap. The associated risk and return of the company
has been calculated and it has been found that the associated return of the company is 0.95%
whereas the beta of the company is 0.15% which depicts that the associated risk of the
company is quite lower as well as the return of the company is also lower (Schlichting, 2013).
Hence, this stock has chosen in this portfolio to diversify the risk level and manage the
overall performance of portfolio. In the portfolio, only 10% weight age has given to the
company.
S&P100 Coca Cola
Mean 0.51% 0.95%
Variance 0.02% 0.15%
Standard
Deviation 0.014 0.039
Covariance 0.053%
Beta 2.80978