following homework scenario:
Websites report the current GDP, the current Federal deficit, the current
Federal debt, and the bottom line of the current (last) budget approved by
Congress (surplus or shortage). Note that the fiscal year for the federal
government is October 1 – September 31.
What inference can you
draw from the numbers collected?
1. Indicate the companies you are investing in: Select three (3) US companies that are
publicly traded. Please use your knowledge and experience and pick, as
many stocks as you’d like. Lastly, make sure you are practicing good
diversification. Jim Cramer, Money Manger, on CNBC, plays a game at the end of
his show called “Am I Diversified.” Check out a short clip to get a sense of
industry diversification at https://www.youtube.com/watch?v=f3lDxexupcE.
2. Sources of Information: There are many ways to find such companies
and the stock prices, including the New York Stock Exchange
at http://www.nyse.com, Google Finance at http://google.com, NASDAQ at http://www.nasdaq.com,
3. Indicate the amount you are investing in each
company: Decide how you will
divide $25,000 across the three (3) companies; e.g. $10,000 in Company 1,
$10,000 in Company 2, and $5,000 in Company 3. You decide the amount you are
investing in each company. You do not have to provide any analysis to justify
your decisions. You must only provide some reason for picking that company. For
example, you might invest in Ford because that company gets a lot of your money
and you hear that Ford is doing well, and will continue to do well.
4. Indicate the number of shares you are buying,
and the price of the shares you are buying for each company: Once you decide the companies and the
amount for each company, determine how many shares you can buy. If Company 1 is
selling for $42.16, then you may buy $10,000/ $42.16, or 237.19 shares. But you
cannot buy a part of a share, so you decide to buy either 237 or 238. In this
example you buy 237 shares, at $42.16 per share, investing $9,991.92. You won’t
be able to buy exactly $10,000, or $5,000, or $25,000, but it will be