Modify your portfolio to make it consistent with your goals, objectives, constraints and preference, and your final portfolio.

Fin 326 portfolio project 02

PORTFOLIO REPORT

Introduction
This portfolio report is created to give an overview of my current financial status and strategies in order to evaluate performance, identify changes needed and create new goals. In this report any potential risks will be discussed, as well as the potential opportunities for growth. My overall strategy is to achieve positive returns while still maintaining a low risk level profile with maximum flexibility.

Goals, Objectives, Constraints & Preferences
My main goal with this portfolio is to have long term capital appreciation in order to reach retirement age without depending on others financially. I will also strive for consistent income from investments so that I can live comfortably while also keeping enough liquidity available at all times including extra funds set aside in case of emergency or unplanned expenses. Another important factor I am taking into consideration here is diversification; although most of my investments are stock based there will be some bonds included within the portfolio in order to maintain balance and reduce fluctuations caused by market volatility. Furthermore taxes are taken into account when choosing instruments which provide me with tax shielded savings or other incentives such as dividends being taxed at lower rate than regular income taxes (this attribute varies widely among countries). As a result my overall objective it’s trying maximize returns while minimizing risks and losses due varied sources: Market fluctuations, inflation and taxes (capital gains).

Portfolio Modification                                        Assets Allocation (%) Cash | 10 Stocks | 70 Bonds | 20

After analyzing my current financial situation following modifications were made regarding my asset allocation: A larger portion of stocks has been allocated more money since they provide higher returns but more stability was achieved by allocating some cash in form of liquid assets like Money Markets Funds which guarantee withdrawal privileges without penalties plus interest earnings with little approach risk (in comparison with certificates time deposits which have high yield rates but longer term commitment periods). Finally bonds were added since they tend to increase profit margins during volatile markets keyed down by Federal Reserve Open Market Committee decisions when decreasing interest rates levels across US economy further increasing bond prices thus generating more return then what could had been expected if invested solely on equities part. The table below summarizes results after applying these adjustments:

Assets Allocation (%) Cash | 30 Stocks | 60 Bonds| 10

Portfolio Performance Evaluation ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
Since rebalancing was done capitalization weighting shifted toward equity side reducing volatility compared previous one meaning less risk hence better Sharpe Ratio evaluation applied over lifespan period considered . This phenomenon can largely attributed previously mentioned fact that government issued securities usually come hand lowered annual percentage terms making them attractive investment vehicles present day investor climate where yields coming from stocks decreased drastically past decade specially those considered “blue chip” names within certain industry sector(s). Other metrics used determine performance include Alpha Beta Standard Deviation Comparative Analysis each providing its respective interpretation records regard acquisition various instruments utilized herein dividend yielding capabilities great importance foregoing factors essential understand full scope strategy implemented over given timeframe measure successes failures project itself should succeeded achieving pre-defined objectives noted previous sections above respectively.