Individual Investment analysis Game Project (Final Report)
Question
Task: How can data-driven research and critical thinking enhance investment analysis decision-making in the stock market forecast market?
Answer
Summary of Investment analysis Results for the Last 10 Weeks:
Based on the supplied data and My investing strategy, My investment analysis portfolio has seen a variety of capital gains, losses, and possible dividend income during the previous 10 weeks. We will use the closing prices of My stock market forecasts and ETF as of September 8th to determine these findings (Narang, Joshi, Bisht, & Pal, 2022).
AAPL (Apple Inc.):
Initial Quantity: 50 shares
Average Price Paid: $179.34
Current Price (as of 08 September): $178.18
Capital Gain/Loss per Share: -$1.16
Total Capital Gain/Loss: -$58.00
Dividend Income: Dividends of $12
MSFT (Microsoft Corporation):
Initial Quantity: 20 shares
Average Price Paid: $332.38
Current Price (as of 08 September): $334.27
Capital Gain/Loss per Share: $1.89
Total Capital Gain/Loss: $37.80
Dividend Income:
SPY (SPDR S&P 500 ETF Trust):
Initial Quantity: 10 shares
Average Price Paid: $448.42
Current Price (as of 08 September): $445.52
Capital Gain/Loss per Share: -$2.90
Total Capital Gain/Loss: -$29.00
Dividend Income:
TSLA (Tesla, Inc.):
Initial Quantity: 5 shares
Average Price Paid: $248.45
Current Price (as of 08 September): $248.50
Capital Gain/Loss per Share: $0.05
Total Capital Gain/Loss: $0.25
Dividend Income:
META (Meta Platforms, Inc.):
Initial Quantity: 20 shares
Average Price Paid: $299.50
Current Price (as of 08 September): $305.75
Capital Gain/Loss per Share: $6.25
Total Capital Gain/Loss: $125.00
Dividend Income:
ARKF (ARK Fintech Innovation ETF):
Initial Quantity: 100 shares
Average Price Paid: $21.22
Current Price (as of 08 September): $21.16
Capital Gain/Loss per Share: -$0.06
Total Capital Gain/Loss: -$6.00
Dividend Income:
Overall investment analysis results calculation:
Total Portfolio Value (as of 08 September):
AAPL: (50 shares * $178.18) = $8,909
MSFT: (20 shares * $334.27) = $6,685.40
SPY: (10 shares * $445.52) = $4,455.20
TSLA: (5 shares * $248.50) = $1,242.50
META: (20 shares * $305.75) = $6,115
ARKF: (100 shares * $21.16) = $2,116
Cash Balance: $70,949.96
Total Portfolio Value: $100,310.86
Total Capital Gain/Loss:
AAPL: -$58.00
MSFT: $37.80
SPY: -$29.00
TSLA: $0.25
META: $125.00
ARKF: -$6.00
Total Capital Gain/Loss: $70.05
Total Dividend Income:
Summary of Investment analysis Results:
My investment analysis portfolio has seen a number of financial changes over the past ten weeks, with each asset responding differently to market factors. Let's examine the specific outcomes depending on the supplied information and My investment analysis plan.
AAPL (Apple Inc.):
50 shares of Apple were first purchased at an average price of $179.34. The stock market forecast was trading at $178.18 as of September 8th, resulting in a capital loss of -$1.16 per share, or a loss of -$58 overall. But from this stake, you received a dividend income of $12.
MSFT (Microsoft Corporation):
With an average purchase price of $332.38 for 20 shares, My investment analysis in Microsoft performed better. Microsoft's share price on September 8th was $334.27, resulting in a capital gain of $1.89 per share and profits of $37.80 overall. Although you didn't mention dividends, Microsoft frequently pays dividends, which might increase My income.
SPY (SPDR S&P 500 ETF Trust):
The initial investment analysis in SPY cost $448.42 on average for 10 shares. With SPY's price at $445.52 as of September 8th, there had been a capital loss of $2.90 per share, for a total loss of $29. Despite the fact that ETFs like SPY often pay dividends, you omitted to mention the amount.
TSLA (Tesla, Inc.):
5 shares of Tesla were first purchased on average for $248.45 each. Tesla's stock market forecast price as of September 8th was $248.50, translating into a modest capital gain of $0.05 per share, or profits of $0.25. For this asset, there were no defined dividends.
META (Meta Platforms, Inc.):
My investment analysis in Meta Platforms has paid off, with an average purchase price of $299.50 for 20 shares. Meta's stock market forecast price as of September 8th was $305.75, which equaled a capital gain of $6.25 a share, or $125 in profits. Like Microsoft, Meta often pays dividends.
ARKF (ARK Fintech Innovation ETF):
100 shares of ARKF were first purchased on average for $21.22 each. ARKF was trading at $21.16 as of September 8th, resulting in a little capital loss of -$0.06 per share, for a total loss of -$6. Although it wasn't included in My data, ARKF may possibly provide dividend income.
As of September 8th, the total value of My portfolio was $100,310.86. You have a net capital gain of $70.05 after adding all My capital gains and losses. In addition, Apple sent you $12 in dividend income.
The necessity of properly managingthe portfolio in accordance with my investing strategy, which is based on technical analysis and precise entry and exit points established by moving averages, is highlighted by this in-depth examination (Ivanyuk & Berzin, 2020). It's critical to keep a close eye on the state of the market and the underlying principles of the assets you own. To ensure that My investing plan is in line with My financial objectives and risk tolerance, consider making any required modifications.
2. How I made specific major investment analysis decisions
In the capital market, making important investment analysis decisions requires a mix of data analysis, critical thought, and adherence to a well defined investment analysis plan. I'll use Apple Inc. (AAPL) as an example to demonstrate the procedure and describe how I would decide on individual investment analysiss based on the given facts, capital market knowledge, and critical thinking (Cheng, Huang, Fu, Wang, Wang, & Lin, 2021).
Initial Assessment:
Average Price Paid: $179.34
Current Price (as of 08 September): $178.18
Quantity: 50 shares
Projected Gain: 13-15%
Capital Market Analysis:
Moving Averages: On both weekly and monthly timescales, my investing approach uses two Exponential Moving Averages (EMAs), with a 12-period slow EMA and a 25-period fast EMA.
Support and Resistance Levels: I pay special attention to what these EMAs show as support and resistance levels. In this instance, the weekly chart's 25-period EMA is regarded as the initial entry level, while the monthly chart's 25-period EMA is regarded as the accumulation level.
Exit/Book Profit Levels: With an anticipated gain of 13–15% from the typical buy price, I have set an exit or book profit level of $200 for AAPL.
Critical Thinking and Decision-Making:
a. Comparing the Current Price to Averages: As of September 8th, Apple Inc.'s share price is $178.18, which is a little less than the $179.34 average purchase price. The difference, meanwhile, is not very significant and falls within the range of market variations.
b. Examining EMA Levels: Using the investing plan as my starting point, I examine the EMA levels. On the weekly chart, the price is currently near to the 25-period EMA, which acts as an entry level. This suggests that the stock market forecast may be at a place where an upward advance is likely.
c. Examining expected increase: A 13–15% increase is expected for AAPL; it's critical to determine whether this gain is consistent with my investing objectives. A rise of this size is both attainable and appealing for a stock market forecast like AAPL.
d. Market and business news: Critical thinking also takes into account outside influences. I would go through the most current news regarding Apple, its earnings, new product introductions, and market mood. Positive developments or news may boost investors' confidence in the investment analysis.
e. Portfolio Diversification: In addition, I would think about how AAPL fits into my overall portfolio of investment analysiss. Risk management relies heavily on diversity, therefore I would determine if adding or keeping AAPL is consistent with my portfolio's diversification objectives.
Decision:
Here is how I would approach my investing choice in AAPL based on my analysis and critical thinking process:
On the weekly chart, the current price's proximity to the 25-period EMA points to a probable entry position.
The predicted rise of 13–15% is consistent with my investing objectives, and AAPL is a solid firm overall.
Considering market changes, there is a slight capital loss from the average buying price, but it is within an acceptable range.
Positive news on Apple's product launches and financial situation further supports the choice.
Therefore, based on the technical analysis and critical thinking used, I would continue to keep my investment analysis in AAPL since it seems to be poised for potential increases. To make wise selections in the future, I would still keep an eye on the stock market forecast's performance, outside market forces, and Apple-related news. In addition, I would review my $200.00 exit/booking profit threshold and think about modifying it in light of changing market circumstances and the stock market forecast's performance (Rahiminezhad Galankashi, Mokhatab Rafiei, & Ghezelbash, 2020).
Data-driven research must be used in the financial markets along with critical thought and a well-defined investing plan. With the help of this strategy, investors may make well-informed choices that complement their financial objectives and risk appetite while adjusting to shifting market conditions.
PART B - S&P 500 and NASDAQ FORECAST Index 4th Quarter 2023 Forecasting
It's critical to evaluate the capital market picture as 2023's fourth quarter approaches, with a focus on the S&P 500 Index and the NASDAQ FORECAST Index in particular. These indexes act as important leading indicators for the larger U.S. stock market forecast market and can give important information about upcoming market developments. We'll take into account the present market circumstances, technical analysis, and anticipated increases for both indexes to produce a prognosis (Rouf, et al., 2021).
S&P 500 Index:
Current Price: $4,475
The price of the S&P 500 Index has been hovering around its record high of $4,820. A substantial psychological and technical barrier point is represented by this level. It's crucial to keep in mind that the index is now down somewhat from its top, trading around $4,475.
Crucial Levels:
25-period EMA (Weekly): $4,338
25-period EMA (Monthly): $4,125
Outlook:
The fourth quarter's prognosis for the S&P 500 Index is marked by cautious optimism. Taking into account past index performance and current market tendencies, the anticipated gain for this time frame is estimated to be between 3 and 8%.
The tremendous expansion of the S&P 500 in recent years, which reflects the underlying strength of the American economy and the resiliency of its business sector, must be recognised. Due to this rise, the index is currently trading close to its all-time high, which frequently acts as a psychological and technical resistance barrier. Although such heights can be seen as bullish, they also make one wonder whether consolidation or brief declines are possible.
S&P 500's outlook & key considerations:
1. Strong economic fundamentals, such as persistent corporate profits growth and historically low interest rates, serve as the foundation for the S&P 500's ongoing durability. These elements have given the index's performance a strong basis and given investors hope.
2. Retracement Risk: There is a retracement risk whenever an index trades close to its all-time high. This indicates that the index can retreat from its top levels before perhaps beginning to go higher again. Investors should use care under these circumstances and think about holding off on making long-term investment analysis commitments until the market has corrected to lower levels. This strategy can lessen the effects of recent market volatility.
3. Macroeconomic aspects: It's important to keep an eye out for macroeconomic aspects in order to make wise investing selections. Interest rate increases and other Federal Reserve policy choices may have a big influence on the market's mood and trajectory. Geopolitical occurrences like trade disputes or geopolitical conflicts can also cause market instability. Investors must be aware of these changes and how they could affect the S&P 500.
The S&P 500 Index looks promising for the fourth quarter of 2023, with a forecast increase of 3-8%, according to estimates. Although the index's recent increase and the strength of the economy's fundamentals are encouraging signs, the index's closeness to all-time highs calls for caution. To maximise long-term investment analysiss, investors should be aware of the possibility of retracement and think about waiting for more advantageous entry positions (Gandhmal & Kumar, 2019). The ability to successfully navigate the changing environment of the capital markets also depends on remaining educated on macroeconomic developments and central bank policy.
NASDAQ FORECAST Index:
NASDAQ FORECAST is not specifically mentioned in the memo, although it appears to be trading close to its highs.
The NASDAQ FORECAST Index, which mostly includes growth and technology businesses, has excelled in recent years. The message mentions that NASDAQ FORECAST is trading around its highs, while the actual price isn't given.
Crucial Levels:
25-period EMA (Weekly): Not provided
25-period EMA (Monthly): Not provided
OutLook:
With an anticipated predicted increase of between 10-15%, the fourth quarter of 2023 for the NASDAQ FORECAST Index looks to have the potential to be lucrative. This forecast highlights the continued strength of the technology and growth sectors, which have been the main drivers of the index's impressive success in recent years. However, owing to the inherent danger of retracement, it is imperative to proceed with caution, as the note correctly suggests.
NASDAQ FORECAST Index outlook & key considerations Key Considerations:
1. The NASDAQ FORECAST Index has prospered due to the technology sector's fast development and innovation. Investors looking for exposure to cutting-edge technologies like artificial intelligence, cloud computing, and electric cars have been drawn to tech firms' constant delivery of high-growth potential. The index's upbeat outlook continues to be significantly influenced by this growth potential.
2. Volatility and Retracement: Even if the prognosis points to increases in the positive direction, it is crucial for investors to be ready for any market volatility, especially in high-growth industries. The retracement caution serves as a reminder that significant market declines can still happen even in an environment of confidence. Investors should exercise caution and think about navigating such volatility by placing stop-loss orders and being ready for transient swings.
3. diversity: Within the NASDAQ FORECAST Index, diversity is a wise tactic for efficiently managing risk. This entails distributing investment analysiss among a variety of assets, including stable, established IT giants and promising, smaller businesses. You may lessen My exposure to the risk associated with specific stock market forecasts and develop a more well-rounded and durable investing plan by diversifying My portfolio.
The NASDAQ FORECAST Index is expected to expand by between 10% and 15% in the fourth quarter of 2023, which bodes well for the market overall. The resilience of the technology and growth industries serves as the foundation for this confidence. However, due to the possibility of a pullback and market instability, care is advised. To properly manage risk, investors should stay educated, keep a careful eye on their holdings, and think about diversification. Ultimately, for managing the unpredictable environment of the capital markets, a well-considered investing plan that is in line with My financial goals and risk tolerance is essential (Aloud & Alkhamees, 2021).
Conclusion:
According to the S&P 500 and NASDAQ FORECAST Index forecasts, the financial markets have a promising prognosis for the fourth quarter of 2023, but there is a catch. Both indexes have demonstrated strength and the potential for increases, but because they are now trading so near to their highs, there is some risk that they may retrace. Before making long-term investment analysiss, investors should exercise care and think about waiting for retracements to lower levels.
It's critical to keep up with macroeconomic developments, pay close attention to market developments, and maintain adaptability in My investing strategies. Even in times of optimism, diversification is a crucial approach for efficiently managing risk. Always think carefully before making an investment analysis decision to match My portfolio with My financial goals and risk tolerance. This includes consulting with financial experts or doing extensive research.
References
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