Analysis of the Stocks of Apple

Question: From the point of view of an investor who wishes to evaluate whether the stocks that you examined are worth investing in, how useful was the analysis you carried out on these stocks? What limitations do you see in your analysis and results for investment decision making purposes? What further analysis would you wish to carry out? Explain. Answer: Effectiveness of the Analysis: The Portfolio analysis of the stocks of Apple, BHP Billiton Ltd. and Citi Group has provided many useful information regarding the profitability and investment risks related to the stocks. Though the present discrete return rate of Apple Inc is showing negative value, the volume of negative rate is nominal and in the recent past the market value of the Apple Inc. stocks has increased significantly. Whereas, the market value of BHP Billiton Ltd. has experienced high up and downs. It indicates that the stock prices of Billiton Ltd. are not stable and consisted with high-risk elements. The prices of the Citi Group stocks have recently fallen greatly, but it has also maintained a steady growth over the recent past. The weighted average rate of return of the three stocks is also quite unstable (Kranner et al. 2015). Hence, amongst the three stocks, it is better to invest in the stocks of Apple Inc. and Citi Group. The BHP Billiton Group can be considered for investment, but, the volume of investment should be minimum to avoid the high risk, connected with the stocks. Limitations of the Analysis: The analytical process, adopted in the report, has not provided any guidance on the proportionate investment. It has given focus on the risk analysis of the individual stocks and the combined rate of return of all three stocks. There is no reference given on how the total investment amount can be divided among the three stocks to segregate the risk factor (Picard 2014). Additional Requirement: Hence, the analysis process should include any diversification method to provide more assistance in the investment decision-making process. Reference List: Kranner, Stephan, Neal Stoughton, and Josef Zechner. "A Natural Experiment in Portfolio Management."Available at SSRN 2514593(2015) Picard, Robert G., ed.Media product portfolios: Issues in management of multiple products and services. Routledge, 2014