Investment

Investment

introduction

Taking a long or a short position in the stock investment requires undertaking either fundamental or technical stock analysis or both. The objective of carrying out stock analysis is to maintain an optimal portfolio diversification, maximize the returns on this investment for the holding period and to limit the associated risks. The analytical components that are utilized by the investors in their criteria for selecting the stock can include analysis of quantitative cumulative value, sector analysis, technical analysis or evaluation of the management issues. Analysis of quantitative cumulative value (fundamental analysis) looks at the company’s historical records of sales, products, earnings, assets, market performance and management. The sector analysis involves looking at different economic sectors that have the likelihood of having superior performance. The management evaluation looks at the perception concerning the management of the target company, and technical analysis looks at the historical, and projection future performance trend of the company.

Given the importance of stock analysis in coming up with an optimal portfolio that will meet the objective of the investor, maximize returns and lower the level of risk, this study will endeavor to carry out an investment analysis of stocks of the companies listed in the Dubai stock market. The objective of the study is to come up with a portfolio comprising of various operating in different sectors. The essence of choosing organizations operating in different sectors is to have efficient portfolio diversification and thus minimize the risks. In essence, the study will utilize the publicly available information for different companies listed in the Dubai Stock market and use it to look to come up with an optimal portfolio that will result to high earnings. In analyzing the stocks, correlation, returns, and simulation techniques will be employed. Three portfolios will be developed comprising the stocks from different companies, and the best portfolio among the three will be selected to invest in.

Theoretical Background

Returns from a given…………………………

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