Final Report on Stocktrack Portfolio Adjustmnet Essay

Final Report on Stocktrack Portfolio Adjustmnet - Essay Example From the specified figures, it is evident that the final results exceed the expected results, which clear show that the performance of the market was good and so the prospects of investing in the market are positive in terms of maximum benefits and minimal risks. Actually, there is a high probability of the investor benefiting from his investments. Generally, the performance of the portfolio against benchmark index posted an outperformed portfolio. The outperformance can be attributed to improved economy that is just recovering from financial crisis thus enhancing investor’s confidence, vigorous positive public relations by organizations and the market that has played a key role in reducing consumer doubts and promoted their confidence in some organizations such as Goldman Sachs Group, Inc. that were victims of unsubstantiated rumors, and the need by market analysts to set new stock goal that reflects the real financial performance of the organization without the influence of external factors such as investor’s loss of confidence. The first bullish trend was caused by high prospects of economic growth as a result of stimulus package given to companies to protect them from going bankrupt. As a result of the bullish trend, the market underwent correction to reflect the reality of the performance of company in the market. Most of the stock was devalued and so the rate of investment in them went down, but after a while the companies started posting positive results hence stimulating confidence in the market . Adjustment 1, which is based on diversification concept worked better because the rate of return and correlation are independent and so the risk in the portfolio can be minimized without affecting the rate of return. Adjustment 3, which is based on trend analysis, did not work well for my analysis because it only shows the theoretic effects of investor’s demand on the stock. In addition, it does not show