Investment Strategy Report paper 

“One of the most important decisions each investor makes is whether to take an active approach or a passive approach to investing” (Jones & Jensen, 2020, p 293). Your client has now asked you to recommend an investment strategy. Prepare a report for the client that reviews the executed portfolios in Stock-Trak and recommends either a passive or active investment strategy.

In your Investment Strategy Report, include the following: 

• Create a table and list the index mutual funds and/or ETFs you purchased. Include in the table
  • the market value and weight of the position in each fund,
  • the index the fund replicates,
  • the strategy of the fund, and
  • the costs to purchase each fund.
• Explain your selection of the funds you purchased.
• Explain the segment of the portfolio invested in funds within the context of a passive management strategy. Identify the following:
  • The theoretical strength of a passive strategy
  • The research-based evidence on passive equity strategies
  • How the selected funds approximate a “Coffeehouse” portfolio
  • The potential weaknesses of this passive strategy
• Create a table that illustrates the performance of the 20 equities and bonds.
  • Calculate the one-week return for each of your 20 equities and bonds through Thursday of this week.
  • Calculate the annualized return for each security and bond.
• For the 20 equities, create a table of the following data, as pulled from Stock-Trak:
  • Dividend per share
  • Current dividend yield
  • Current EPS and expected EPS
  • Historical 1-year growth in revenues and earnings
  • P/E and P/B ratios
• Classify each of your 20 securities as either a value stock or a growth stock. Include your classification on the table.
• Justify your classification of the securities as either value or growth stocks.
• For the 20 equities, create a table of the current market values and the weights of each security in this equity portfolio (ignore the mutual funds, ETFs, and bonds when calculating the weights).
• Categorize the 20-security equity portfolio as either value or growth.
• Justify your categorization of the portfolio based on your data and the weights of each security in the equity portfolio.
• Recommend an investment strategy for the client from one of the following:
  • Buy-and-hold strategy, as implemented with the existing 20 equities and bonds
  • Passive strategy, as implemented using the mutual funds and/or ETFs
  • Active equity strategy based on creating a new portfolio of selected stocks targeting a particular strategy (value stocks, growth stocks, a rotational strategy, or sector investing)
• Support your recommendation with evidence, including the following:
  • The client’s profile (e.g., age, risk tolerance, etc.)
  • Costs to execute each strategy
    • Cite costs incurred in Stock-Trak as well as external information on trading costs.
  • Theory behind each strategy
  • The strengths and weaknesses of each strategy
  • Evidence of performance of portfolios based on these strategies
    • Cite evidence of returns already experienced in Stock-Trak as well as external, research-based evidence.