2022
Stock Market Investment Report
Module: Capital Market Trading
(BFA526)
Word count: 2500 words
including 10%
Excluding Tables, References &
appendix
,Table of Contents
1. Introduction............................................................................................................................1
2. Recent and current market crisis............................................................................................2
3. Random walk Portfolio..........................................................................................................3
4. Expert-led investment portfolio..............................................................................................7
5. Diversified investment portfolio..........................................................................................11
6. Conclusion & Recommendations.........................................................................................15
7. References............................................................................................................................16
8. Appendices (if applicable)....................................................................................................20
1. Introduction
I began my portfolios with a £10,000 beginning balance (3x portfolio). This
is the hypothetical cash sum that was offered. I required to comply to the
asset allocation instructions provided. According to the guidelines, I was
to invest £10,000 in a random walk portfolio, £10,000 in an expert led
portfolio, and £10,000 in a diversified investment portfolio. When deciding
on a stock, I had to weigh numerous risks and evaluations.
1
, I have both immediate and long-term goals in mind when managing my
holdings. My short-term objective is to keep my portfolios out of the bear
market. My long-term objective is to get a 15% return on investment. I will
employ a combination of fundamental and technical analysis with some
moderate risks when deciding the purchase of the stocks. Additionally,
when faced with a liquidity limitation, my preference is to take a moderate
risk, but I will also take a high risk if the portfolio requires it.
This report will analyze past and present stock market crises and analyse
the success of three investment portfolios funded with £10,000 each
(theoretically). The share was purchased on 14th February 2021 and will
be held until 8th April 2021. The data was collected daily throughout these
months. The primary objective is to execute a flawless plan by investing in
the selected portfolios. The portfolio's performance, the stock selection
criteria, the performance of individual stocks, and the portfolio's total
return over the period. A comparison will be made to the FSTE 100's
performance.
2. Recent and current market crisis
Russian- Ukraine conflict hitting the global
markets
Global financial markets have
dropped in response to investors'
fears of military conflict in
Ukraine, wiping £53 billion off the
value of the UK's blue-chip index.
European markets plunged 3.8
percent to their lowest levels
since October, the steepest one-
day decline in more than 18
months, as Nato announced it
will build up its eastern border
defenses in reaction to a highly
probable Russian invasion of
Ukraine (Graeme Wearden
2022).
Volatility spiked as investors worried that the Bank of England, will hike
interest rates many times this year, beginning in March, following a 40-
year high of 7% in December. The FTSE 100 index in the London plunged
2.6 percent to a one-month low, its worst drop in two months, as Boris
cautioned that a "lightning war" in Ukraine was possible but not
inevitable. The FTSE 250 average fell 197 points to 7,297 (Graeme
Wearden 2022).
2
Stock Market Investment Report
Module: Capital Market Trading
(BFA526)
Word count: 2500 words
including 10%
Excluding Tables, References &
appendix
,Table of Contents
1. Introduction............................................................................................................................1
2. Recent and current market crisis............................................................................................2
3. Random walk Portfolio..........................................................................................................3
4. Expert-led investment portfolio..............................................................................................7
5. Diversified investment portfolio..........................................................................................11
6. Conclusion & Recommendations.........................................................................................15
7. References............................................................................................................................16
8. Appendices (if applicable)....................................................................................................20
1. Introduction
I began my portfolios with a £10,000 beginning balance (3x portfolio). This
is the hypothetical cash sum that was offered. I required to comply to the
asset allocation instructions provided. According to the guidelines, I was
to invest £10,000 in a random walk portfolio, £10,000 in an expert led
portfolio, and £10,000 in a diversified investment portfolio. When deciding
on a stock, I had to weigh numerous risks and evaluations.
1
, I have both immediate and long-term goals in mind when managing my
holdings. My short-term objective is to keep my portfolios out of the bear
market. My long-term objective is to get a 15% return on investment. I will
employ a combination of fundamental and technical analysis with some
moderate risks when deciding the purchase of the stocks. Additionally,
when faced with a liquidity limitation, my preference is to take a moderate
risk, but I will also take a high risk if the portfolio requires it.
This report will analyze past and present stock market crises and analyse
the success of three investment portfolios funded with £10,000 each
(theoretically). The share was purchased on 14th February 2021 and will
be held until 8th April 2021. The data was collected daily throughout these
months. The primary objective is to execute a flawless plan by investing in
the selected portfolios. The portfolio's performance, the stock selection
criteria, the performance of individual stocks, and the portfolio's total
return over the period. A comparison will be made to the FSTE 100's
performance.
2. Recent and current market crisis
Russian- Ukraine conflict hitting the global
markets
Global financial markets have
dropped in response to investors'
fears of military conflict in
Ukraine, wiping £53 billion off the
value of the UK's blue-chip index.
European markets plunged 3.8
percent to their lowest levels
since October, the steepest one-
day decline in more than 18
months, as Nato announced it
will build up its eastern border
defenses in reaction to a highly
probable Russian invasion of
Ukraine (Graeme Wearden
2022).
Volatility spiked as investors worried that the Bank of England, will hike
interest rates many times this year, beginning in March, following a 40-
year high of 7% in December. The FTSE 100 index in the London plunged
2.6 percent to a one-month low, its worst drop in two months, as Boris
cautioned that a "lightning war" in Ukraine was possible but not
inevitable. The FTSE 250 average fell 197 points to 7,297 (Graeme
Wearden 2022).
2
