Portfolio Project, Part I

Each student will be charged with the management of a hypothetical sum of money ($100,000). You will construct a portfolio and trade individual securities, mutual funds, closed-end funds and/or exchange traded funds (ETF’s). You can compare your performance to a passively managed benchmark portfolio of cash, bonds, and equities.

Objectives 1. Develop portfolio management skills (Asset Allocation, Security Selection, and Trading). 2. Understand how different securities fit into an investment management strategy. 3. Exposure to “real-life” trading mechanics of securities.

Assignment 1. Design an investment portfolio by first allocating your $100,000 across four asset categories (domestic equities, foreign equities, bonds, and cash) and then choosing which securities you will buy within each asset category. 2. Record your portfolio in the table shown at the bottom of the rules. 3. You must follow certain rules listed below when designing your portfolio. 4. Create an account at StockLinkU by going to the following link: http://trading.stocklinku.com/student/register. Create your student account and pick a username that is not embarrassing since we may review results in class. 5. Register for the class by using the instructor supplied class name and registration code. 6. Implement your portfolio plan by purchasing the securities on your account within our game. 7. You will NOT be graded on your returns or your strategy for this part of the project. Instead you will be graded on how well you followed the rules. Grading will be done at the end of the quarter, but you may show your portfolio to the professor for comments.

Rules 1. Asset Allocation Constraints
You will choose how much to invest in each asset class (asset allocation) and which securities to buy (security selection)