Investment Report

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AssignmentPart Two

1:Investing in both individual stock, Mutual Funds and ETFs

Theinvestment plan I considered is the “investment and tradingstrategy” used by KMI, SWHC, PRLEX, GE.

Ichoose to use stock market for the gainers and losers with highcapitalization and that are trading at the NYSE because the riskattached to these large firms is less compared to those with lesscapitalization in my consideration as focused investor and trader Ifound it necessary to use trading rules available where the greaterrule is. Do not use anything that is trading above or close to 52weeks for a meaningful result that can be relied upon by theinvestors willing to prospect their trade ventures, this because ofthe overestimation of the values tagged to them.

Tradingrule two warns us against using the stocks unless they have a minimumor at least a million shares trading. Which is a principle that Ifound worth following because from the research I find that thosetrading above this cutpoint are less expensive to buy and sell andsince this is a major determinant and with a choice of largecorporations the rules applies automatically in my case. Below arethe trends of the stocks and mutual fund investments


Forthe momentum strategy on investment decision making on stock at timesstarts as a contrarian in the past but on the way they got to improvesubstantially to become increase in time to entry to the category ofthe gainers. KMI has over a period as recently improved overtime inprices.


GeneralElectric Corporation

Tradingrule three that avoid small capitalized stocks in this case of trademy take of the large trading companies that I picked already fit wellwith the accordance with the rule.

Thelast rule in the case is the rule that overall analyst recommendationon their opinions the which may range from one to the other but withthe best estimator being the one close to one the analyst opinion,however, may not be based on research and the decision on whether andto which stock to buy falls under this rule.

Inthe rules of investment there come of it various disparities anddifferences in the outcome

Therule number one is comparison of P/E if the current is less than thetrailing one.

KMI,current P/E 20.1 is and their ratio is 36.55 (Yahoo Finance, 2015).

SWHC,current P/E 20.49 and their ratio is 818.3

PRLEX,current P/E 34.2

GE,current P/E 90.6 and there is ratio 90.7

Thesecond rule looks at the pattern for the companies with decrease innet company value showing that good performance and increasingshowing good performance and hence good investment decision

Toend within the investment rule on the overview of the insiders of thecompanies so as to ensure that they know their expectations on thefuture performance of the company and how they can improve theirinvestment portfolio Examine firms trailing net income pattern to seeif there are profits and if profits exhibit an increasing patternover this period.

  • The reason as to why I chose KMI, in this case, is based on the reports from the year 2011 to date. That saw it have high returns over time with their dividends ranging from $1.20 per share all to $1.80 in as at September this year which I considered a good return for any investor willing and able to invest (Yahoo Finance, 2015). Their further prediction of $ 2 per share payment in the 2015 fiscal year also give me an edge of investing in the company. More to this the other consideration I took many reviews in was the net incomes of the company over the years. In 2011 KMI the net income was $4.8 billion in 2012 the overall net income was $5 billion in 2013 the net income was $6 billion in 2014 the income slightly above 6 billion. KMI net income pattern has been constantly and consistently been increasing in the past few years. And according to my future prediction I find that it may or will constantly remain to change at this level for quite some time over the next years influencing be to invest in the company.

  • SWHC-In 2009 the net income was $5.78 million in 2010 the overall net income was $3,785million in 2012 the net income was $303.10 million, and in 2013 the income was $4,653.63 million. SWHC overall net income pattern has been more inconsistent. I predict that the company will continue to be inconsistent at least for quite some time in the near future.

  • PRLEX- In 2011the net income was $56.22 million onwards in 2012 the overall net income was $52.69 million coming to the 2013 the net income was $47.34million progressively in 2014 the income was $39.95 million and as of today their income was $36.86 million with bate of the year still to go. PRLEX overall net income pattern has decreased over the past five years. However, I predict that their net income pattern will completely flip and start earning more profit. The fund approach is another approach for the investor that needs was an easy pick when looking at funds that follow the market. This fund only invests in or similar well-established companies that tend to have less volatility and little likelihood of ultimate failure.

  • GE- In 2011 the net income was $456 million in 2012the overall net income was $1.93 billion in 2013 the net income was $203 million in 2014 the income was $335 million, and in 2015 their income is $2.71 billion. GE overall net income pattern has significantly increased over the past five years.

  • TRE-In 2011 the net income was $189 million and in 2012 the overall net income was $81million, in 2013 the net income was $345 million in 2014 the income was $153 million and in 2012 their income was $234 million. TREs the net income progress has not been very consistent over the past few years. Nevertheless, I believe that the corporation change the trends of the profits will be more consistent in the future compared.

Part2: Profit/Losses for the various investment strategies

Belowis the table of the various investment strategies running frommomentum, contrarian, fund approach and own strategies that have beenuse for the calculation of the returns for the the selected companiesfor gainers, losers for stocks, mutual fund and the own strategyapproach.

Momentum (Gainers)

Contrarian (Losers)


Own Strategy







Shares Purchased






Price Purchased $






Current Price $1






Commission Fees $






Profit Per Share $2






Gain on Investment 3





-3 .67

Return on Investment4





– 4.88


  1. Kinder Morgan inc

    1. Profit per share: 72.2 – 68.56 = 3.64

    2. Gain on Investment:

    3. Return on Investment:

  2. For sold stocks, there will also be not one but two commission charges as shown on the table.

  3. The Current price for the sold stocks is what I considered the selling price.

Fromthe results of my calculations, the momentum investment strategyproduced higher results compared to the rest. It can be clearly seenher that the results can be ranked with the winners being at the top,followed by the own then the market or fund and losers finally cominglast. With investments basically on the increase, and returns comingfrom the initial stage. However, the stock did well in the variouscompanies, where KMI and General Electric others never did well. Inmy case, the own strategy had the greatest risk. The company chosenwas in the bases explained earlier, and the outcome is showing why Ihad to choose the diverse portfolio. More in this funds strategy givethe results as expected and giving the reflective figure of themarket expectation as a whole on returns it is good in this case tounderstand and find out that as the term lose is so are the resultshowing that it is coming last. The company further proved latterlythat it managed to continue sustaining the decline of the returns.

Basingthe arguments on percentages in the calculations above I find some ofthe most unanticipated results, especially in the contrarian strategywith it showing high percentages on returns as well as the gains onthe investments. I must, in this case, say that it disapproved myexpectation where my expectation was that it would have less thanwhat I found in the results calculate. In the choice of the decisionupon which to take for the contrarian strategy, I found that thelosers buying price fell at an aggregate of $12 in share price beforethe prices started rising. With this in mind, I found it best to buythe stock at that moment.

However,the rise was not as expected because after a period of one month thefall becomes worse prompting me to sell all my stock, with theexpectation that I would make reasonable proceeds that were never thecase. For a fact, I got a very small gain of less than $10 on thesale of 103 shares. The desperation saw me readily sell the shareswithout holding them for a longer period upon which the price shortup and which could have made more gain of up to $400 forty times theone earned as potential profit. Which bring me to the conclusion thatas an investor there are times at which holding the stocks even whenthey are not performing well is good for the future if there is aprospect that a good time is coming for a rise in price. And thatconfidence when investing in stock is a thing for any determinedinvestor.


YahooFinance. (2015). Industry Browser.Retrieved 10 November2015. From.





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