You need to turn in a 2-3 page (minimum length requirement), single-spaced paper.
Use Times New Roman, 12-point font with 1-inch margins.
Make sure to organize your thoughts logically and professionally. Use paragraphs and good sentence structure.
Your paper needs to include the following elements (in this order):
At the top of your paper, the FIRST thing that I should see is a single sentence (in boldface) telling me if you are attempting active management, passive management, or a blended strategy. If you are in doubt about what these strategies entail, then see the discussion in the ebook.
The SECOND element should have a subheading of “Overall Strategy”. This section should contain one (or two at the most) well-structured paragraph(s) discussing your high-level strategy. For example, you might be trying to capture a trend in a given industry, focus on growth opportunities, seek out value plays, or some other high-level strategy. How much do you plan to invest in stocks versus bonds (i.e., what is your asset allocation mix). It is critical that you have a high-level plan.
The THIRD element should have a subheading of “Individual Investments”. This section should contain a detailed descriiption of specifically why you plan to purchase each investment. Under the subheading of “Individual Investments”, you should list each investment. Put the name of the fund in boldface and the ticker (trading) symbol in () after the name. The name should be followed by “:” and then there should be 3-4 detailed sentences on why you want to put money in this specific fund. This step will help you think about when to sell and how to evaluate your investment thesis at the end of the semester. See below for a brief example. You need to be more detailed than this descriiption, but this points you in the right direction. DO NOT simply copy what I wrote below.
Vanguard Equity Income Fund (VEIRX): This fund is an actively managed, value-focused mutual fund that overweights defensive plays. This fits my overall investment thesis. Their top holdings are well diversified, and their expenses are minimal.
The FOURTH element should have a subheading of “RiskAlyze Risk Management”. You need to discuss what RiskAlyze finds as the risk score for your investments. Please discuss what you learned from using RiskAlyze to develop your initial portfolio allocation. Please also discuss what you learned from the heatmap and how RiskAlyze helped you to build a better initial portfolio. You should use the snipping tool Links to an external site.to capture your portfolio’s RiskAlyze score. This image should be nested to the right of your RiskAlyze discussion and the image should be large enough to read, but not so large that it appears to be a space filler to mask a weak discussion.
The FIFTH element should have a subheading final section should be labeled “Portfolio-Level Statistics”. This section relies on access to Y-Charts. Take a look at the image below to see what I want this section to look like. You need to build something that looks just like what I displayed below. This could easily fill one whole page by itself.
The graph at the top of this section uses the snipping tool and it is found on the “Performance” tab after you clicked on the blue link for your portfolio in Y-Charts. Make sure that you are using a 1-year graph. This should be the only screen snip on your paper from Y-Charts. If your graph does not look like the one below, then something is wrong. Make sure that you created a “portfolio” and not just typed the assets into a Fundamental Chart view.
You will find the expense ratio, the stock allocation, the bond allocation, the 1-year return, and the risk information on the “Quotes” tab.
All information listed as “Risk Information” (below) comes from the bottom right on the Quotes tab. Use the 3-year data, which may not appear correctly if you missed step 4 in the first (of two) numbered lists relative to Y-Charts on these instructions).
The top three sector exposures are on the “Allocation” tab under the section labeled as “Stock Sector Exposure” on the bottom right of the screen. Make sure that you turn in high-quality work and tell me the percentages for each category.
The annual benchmark-relative returns are found in the bottom two panels on the “Performance” tab. Use the most recent three years (I used 2016, 2017, and 2018 in my example due to when I created the image)… if more recent data is available, then use the most recent three years. Benchmark-relative return means that if the fund earned 10% and the benchmark earned 12%, then I should see -2% for that period because the fund underperformed the benchmark.