Charting the Course: Crafting an Investment Blueprint

Investment refers to the allocation of some amount of money with an expectation of getting profits in future. Investment aids in boosting one’s wealth. Investment entails purchasing of assets at given price and selling the assets at a higher rate with the aim of gaining a higher revenue. Investment needs a set of procedures, guidelines or behaviors planned to guide an investor in selecting a given investment portfolio. Depending on the type of the business, an investor can apply a number of strategies to make the company successful. The analysis explores some of the strategies in comparison with the momentum, contrarian, and fund approach. The paper also discusses the profitable and most appropriate approach.

Strategy: investment strategy described as strategy and strategic management

I choose a strategy and strategic management because the plans and actions to be performed in every step are contained in the idea of the goals. The objective of the policy is to prepare the business organization to confront the current antagonistic environment (Mainardes, Ferreira and Raposo 43). The strategy will be a tool for bringing victory into the organization. The strategy will move with the environmental changes and will be able to increase the complexity of the organization. (Mainardes, Ferreira and Raposo 44). My strategy will consider the longtime momentum of the company that will help in predicting how the company will be in future. The contrarian approach will show the factors that a company that has the ability to do better in future regardless of it getting loses. The fund approach will show the business earning will be in future using the historical data. The strategy is important as it indicates the duration of the specific time duration.(Glamouridis 10)

Why choose an investment strategy

The reason for choosing the strategy and strategic management is that the approach helps in creating a competitive environment. The procedure shows the organizational analysis, decisions that can help in sustaining and building competition to other business organization. (Mainardes, Ferreira and Raposo 48).

Rules followed for the chosen strategy.

 First, I considered the cash inflows, the financial position of the organization and the income statement before starting to invest. Second, the methodology and phenomenography of the business to explore the decisions and the data collection (Mainardes, Ferreira and Raposo 50). Third strategy rule that I considered is the best breed. The company will produce the best brands of a give product that are highly admired and the tremendous brands. Forth rule is the straightforward goods.  The business should invest in fairly straightforward and easy to understand products.

Another rule is to invest in the stock that fills the framework, that can produce more sufficient income, and that can increase the state of the company, I chose this strategy because the strategy has set of vision, is profitable, and I will be able to raise the income. The next rule was the value investing. The products that will meet the customer specification. The technology of branding the products, identify the best place to locate the business and focusing on the customer’s service. (Mainardes, Ferreira and Raposo 54). The rules will provide me with the opportunity to have more profits even if the price of the products go down.

Momentum: IBM Company

For the momentum section, I chose IBM Company because it is historically stable. The paragraph explains the strategy in details. There are several factors that I considered before deciding to invest in IBM Company. To begin with long-term sustainability.  There is no doubt that IBM is the future software business. It is secure to invest in this company because the IBM Company will offer a platform where I can do the business online and make smart trades. Secondly, working with IBM improves the creativity of a person, and one can gain a measurable business advantage.

Contrarian approach: Panasonic Company

I used Panasonic Company in analyzing my contrarian approach. There has been a constant dropping in the profits because the company spends more than the earnings. Investors should invest on a long-term with the company because when the company starts to generate the income it generates is a double percentage of the previous.

Fund strategy

In the fund strategy approach, I chose to invest in the DFA International Core Equity Portfolio. The equity fund is advantageous because the rate of the turnover is low and there is a high holding conviction.  There is a strong competition from the equity fund.  I chose the equity fund because equity fund provides finance that one can use in the expanding of the business. Secondly, when the company sells stock, the company sells the shares to investors for cash that I can use to fund the business growth. The equity fund has a high profitability and a high potential market share. The fund has a favorable rate of return and one can get enough investment horizons for profitability. The challenges of investing with equity fun is that there is a frequent change in the security holding value.

The table below shows information for each stock, mutual fund/ ETF purchased.

momentum

contrarian

Fund

Your own

Ticker

IDM

PNSC

DFIEX

GE

Number of shares purchased

1465

324

2416

3506.008

Price purchased

$68.27

#308.63

$41.37

$32.67

Closing or solid price

$100,OO

$100,000

$100,000

$100,000

Commission fees

$600

$800

$45.90

$35.78

Profit per share

$10.55

$13

$1500

$1300

Gain on investment

13.85%

$4.12

$10.89

$10.067

The above calculation indicates that the pure investing company is more reliable than the others are. The highest performing stock is that of the IBM Company compared to the contrarian and the momentum approach. My strategy performed a way better in comparison to the other funding organization.IDM had a percentage of 13.85 while the DFIEX equity fund had 4.12 percent. My approach was profitable natural investors as compared to the risk-averse investors initiated all around that. The next closest stock was that of the DFIEX equity fund with a gain of 10.59 percent and then contrarian approach with an increase of 4.12 percent.

            In conclusion, contrarian and equity fund did not perform the momentum approach though they were right. From the analysis, I conclude that my plan is a reflection of the momentum approach and is the best approach to apply. I will invest in my company and hold the position to increase the profit.

Works Cited

Mainardes, E, W., Ferreira, J, J., Raposo, M, L. Strategy and strategic management concepts: are   they recognized by management students?, business administration and management.   2014. Pp. 44-60

Glamouridis, D. systematic investment strategies. Financial analysis journal, Vol. 73, no. 4.   2017. Pp. 10-14