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PERSONAL INVESTMENT

PERSONAL INVESTMENT. Team 6 EGR 403 Techie: Jeremy Deake Summarizer: Winnie Lau Organizers: Mimi Ngo Nicolas Tully. Outline. Description of project Scenarios Analysis Sensitivity Analysis Results Conclusion Resources. Description of Project.

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PERSONAL INVESTMENT

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  1. PERSONAL INVESTMENT Team 6 EGR 403 Techie: Jeremy Deake Summarizer: Winnie Lau Organizers: Mimi Ngo Nicolas Tully

  2. Outline • Description of project • Scenarios • Analysis • Sensitivity Analysis • Results • Conclusion • Resources

  3. Description of Project • Comparison between a stock vs. a mutual fund • By using FV and IRR method 25 years old Engineer - $50,000/year (Increase of 2%/year) - Saving 10% of salary/year - Period of 25 years

  4. Scenarios • Scenario 1 – Stock Investment Invest in Pfizer, Inc. • Scenario 2 – Mutual Fund Investment Vanguard Energy Fund

  5. Analysis • Scenario 1 – Stock Investment Collected history of: - dividends per share - price per share Estimated growth by developing trends Calculated FV and IRR

  6. Analysis

  7. Analysis

  8. Analysis • Scenario 2 – Mutual Fund Investment Collected history of: - rate of return for years 1, 5, 7, 9, and 9.66 Estimated growth by developing a trend Calculated FV and IRR

  9. Analysis

  10. Sensitivity Analysis • Scenario 1 – Stock Investment

  11. Sensitivity Analysis • Scenario 1 – Stock Investment

  12. Sensitivity Analysis • Scenario 1 – Stock Investment

  13. Sensitivity Analysis • Scenario 1 – Stock Investment

  14. Sensitivity Analysis • Scenario 1 – Stock Investment

  15. Sensitivity Analysis • Scenario 2 – Mutual Fund Investment

  16. Sensitivity Analysis • Scenario 2 - Mutual Fund Investment

  17. Results • Results using original parameters • Results from Sensitivity Analysis

  18. Conclusion • The best option for this engineer is to invest in Vanguard Energy Fund • Stock investment gives higher ROR if the price/share increases a lot • Is better to invest in smaller growing business but involves higher risks

  19. Resources • Professor Dr. Rosenkrantz • Standard and Poor’s • www.morningstar.com • www.forbes.com

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