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RM Investments

RM Investments. Investments- Fall 2005 Marshall Blake Rachel Swartzbaugh. Outline. Allocations RM Index vs. S&P 500 Ratios Expected Returns and Betas Correlations Efficient Portfolio Conclusion. Diversification. Exxon Mobile (XOM) Texas Utilities (TXU) United Health Group (UNH)

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RM Investments

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  1. RM Investments Investments- Fall 2005 Marshall Blake Rachel Swartzbaugh

  2. Outline • Allocations • RM Index vs. S&P 500 • Ratios • Expected Returns and Betas • Correlations • Efficient Portfolio • Conclusion

  3. Diversification • Exxon Mobile (XOM) • Texas Utilities (TXU) • United Health Group (UNH) • AstraZeneca plc (AZN) • Time Warner (TWTC) • AT& T (T) • Citigroup ( C) • Washington Mutual (WM) • Chicago Bridge & Iron (CBI) • Jacobs Engineering Group Inc. (JEC) • Martha Stewart (MS0) • TRX Inc (TRXI)

  4. Sector Allocations

  5. Asset Allocation

  6. Market Trend (Sept-Nov) Note: Index Multiplier was 8E-04

  7. Ratios

  8. Using Historical Data (past 5 years)

  9. CAPM

  10. CAPM Risk Free Rate= 4.02% Return of Market= 2.37% Portfolio’s E ( r)=2.41% What was expected of portfolio is higher than market’s return.

  11. Correlations

  12. Efficient Portfolio

  13. RM InvestmentsConclusion • A low-risk portfolio • Diversified • Not as efficient as could be • Relatively stable compared with S&P 500 Remember RM Investments!

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