MEMORANDUM

To:            Dr. D. L. T.

From:          Lyles Armour Jr

Date:          February 23, 2009

Subject:       ...
investment risk,” that they would be a suitable place for young investor to place there money to
let it mature over a long...
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Memorandum (Portfolio)

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Memorandum (Portfolio)

  1. 1. MEMORANDUM To: Dr. D. L. T. From: Lyles Armour Jr Date: February 23, 2009 Subject: Portfolio Stock Selections and Purchase Price The location were I invested most of the majority of my stocks is through Amazon (AMZN) where 130 shares were purchased at $66.55 for a total value of $8,651.50. Amazon also carried 35 percent of weight. I then invested 53 shares at $49.63 for a total of $2,639.39 into Wal-Mart (WMT). Wal-Mart consisted of 11 percent of weight. My final selection was for McCormick & Co. Inc where 74 shares were purchased at $33.11 for a total value of $2,450.14. McCormick had a weight of 10 percent, yielding a total of 55 percent weight in my portfolio between the three stocks. Rationale for the Selected Stocks The reason Amazon was a selected stock is because I feel that many consumer will continue to save money with gas and shop online for the cheaper prices. I also believe that with the little debt that Amazon is in, that many will see that is a company with officers and leaders that are able to run a successful company in the middle of a financial crisis. Wal-Mart was selected because I believe that many consumers are looking for ways to save money, because of that they will turn to Wal-Mart for cheap prices. Wal-Mart also provides consumers with alternative non brand name products to fit their needs. McCormick was my final selection again homing in on the consumer needs. I believe that consumers will be more likely to stay home. By staying home consumers will have home cooked meals in high demand. With that there will an increase for seasonings and spice in the consumer home kitchen. The three above stock will be compared to the market using the S&P Index. ETF, Mutual Fund Selections and Purchase Price The Mutual Fund that I selected was John Hancock Bond Fund CL A (JHNBX). It was purchased at $12.33 at 35 shares, for a total value of $419.22. John Hancock had a weight of 2 percent. The ETF that I chose was iShare COMEX Gold Trust (IAU). This ETF was purchased at $89.63 at 121 shares for a total value of $10,845.23. iShare COMEX Gold Trust had a weight of 43 percent yielding a total weight of 45 percent between the ETF and Mutual Bond. Rationale for the selected ETF and Mutual Fund iShare COMEX Gold Trust was my selected Exchange Trade Fund or ETF. I believe that with inflation worries and the fear that the value of the dollar will decrease many will look to gold as a secure location to invest their money. Gold Trust is a location where many have seen large return, and for the most part worry free. My choice for my Mutual Fund was John Hancock, the reason for this was because my awareness with the company. Up until the economic crisis John Hancock has had steady returns with its strength in the forth quarter of every year. I believe that because John Hancock “seeks to generate a high level of current income consistent with prudent
  2. 2. investment risk,” that they would be a suitable place for young investor to place there money to let it mature over a long duration. Bond Selections and Purchase Price The first bond I selected that had a maturity of 5 years or less was Verizon New York Inc. I originally purchased 147 shares at $103.85 for a total value of $15,265.95. The weight for this bond out of the two totaled to 61 percent. I then decided that General Electric Cap Corp to be my choice for a bond with a maturity over 15 years. It was purchased at 99 shares for $99.00 with a total value of $9,702.00. The weight of this bond out of the two totaled 39 percent. The total weight between the two bonds was 100 percent. Rationale for the selected Bonds The reason that Verizon New York Inc. was selected for my maturity of 5 years was because that had a reasonable yield of 5.002% for a short term bond. I also selected this bond because it was callable. I found that to be something valuable under short term situations. I was also pleased with the coupon rate of 6.875% that will allow some minimal returns. The reason that General Electric Cap Corp was selected for my maturity of 15 years was because there was a high yield of 7.009%. I also felt that with the slumping economy that with this bond having a triple A rating was a strong choice for a long term bond. I will be using the Dow Jones Industrial Average to relate my bond selections to the market. Portfolio Outlook I am confident that my portfolio is one suitable for the financial situation out nation is in. I believe that this portfolio homes in to me as a consumer and will react to how consumer will react with the downward spin of the economy. This is a built for consumer portfolio.

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