A Personal Approach to Investing

Abstract

The purpose of the analysis was to apply financial investment strategies to an investment fund owned by the University of Arizona’s Department of Finance. Strict guidelines were set in place by the Investment Policy Statement and followed accordingly. The completed activities helped to reinforce the business curriculum taught in the regular courses in a team setting; this allowed for improved leadership, presentation, and decision-making skills. Research groups were formed and given specific industry sectors to follow. Emphasis was placed on historical asset returns as well as the current economic market structure when applying the investment process and asset allocation concepts. The investment process included four major steps: determining investment objectives, developing asset allocation strategies, portfolio construction and implementation, and ongoing portfolio management. Using the steps highlighted in the Portfolio Management Process resulted in a "top down" method for asset and sector selections and a "bottom up” method for individual security selections. Several relative and absolute valuation methods were learned and applied to both the fixed income and equity markets. Integrity and ethics were also a major focus throughout the year, especially given the weakened state of the financial industry due to these principles being previously compromised.