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      02-18-2012, 12:36 AM   #12
txz4
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Drives: 2006 M coupe
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Location: san antonio, texas

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Quote:
Originally Posted by Vanity View Post
You want to buy in on Monday? When the indexes have just closed at Multi-Year Highs? And you expect them to turn huge profits from now until May?

I believe your professor is throwing your class a curve ball. He's trying to see who is the best at protecting capital. Do yourself a favor and invest in things that appreciate on a defensive basis against stock markets going down. Bonds, Precious Metals, etc. There are also stocks you may research that hold value better in a crash than other companies. Companies like this include McDonalds and Starbucks. You can thank me later.
had my portfolio management teacher do a similar thing. We had to pick 2 stocks from a list and do a rolling 3 yr beta and a Gordon growth. What you find out is that only choosing two stocks based on perceived indicators and history isnt enough, thats the point the teacher was making. I feel you may have the same sort of situation. Hes most likely expecting you to diversify and protect against risk, sort of the opposite of just apple atm.

As vanity said, research defensive stocks. From what weve been seeing defensive stocks should be your best bet. fast food, walgreens, anything that shouldnt be too effected by the state of the economy.
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