INVESTMENT ANALYSIS AND PORTFOLIO STRATEGY (A CASE STUDY OF WEMA BANK PLC)

TABLE OF CONTENT

CHAPTER ONE

1.0    INTRODUCTION

1.2    STATEMENT OF THE PROBLEM

1.3    OBJECTIVE OF THE STUDY

1.4    SCOPE OF THE STUDY

1.5    SIGNIFICANCE OF THE STUDY

1.6    RESEARCH QUESTIONS

1.7    LIMITATION OF THE STUDY

CHAPTER TWO

LITERATURE REVIEW

2.0           INTRODUCTION

 2.1   WHAT IS INVESTING?

2.1.1 Why Invest?

2.1.2 How Do We Invest?

2.2    INVESTMENT THEORY AND STRATEGIES

2.2.1 Passive vs. Active Strategy

2.2.1 Passive vs. Active Strategy

2.2.2     Building an Investment Portfolio

2.3    RISK REDUCTION IN THE STOCK PORTION OF A

PORTFOLIO

2.3.1    Law Of Large Numbers

2.4       MODERN PORTFOLIO THEORY

2.5    UNDERSTANDING INVESTMENT RISK

2.5.1 Definitions and Concepts

2.6    TYPES OF INVESTMENT RISK

CHAPTER THREE

RESEARCH METHODOLOGY

3.0    INTRODUCTION

3.1    RESEARCH DESIGN

3.2    DATA COLLECTION METHOD

3.3    SAMPLING PLAN

3.4    SAMPLING METHOD

3.5    DESRIPTION OF DATA COLLECTION INSTRUMENT

3.6    ADMINISTRATION OF RESEARCH INSTRUMENT

3.7    ANALYTICAL PROCEDURE

3.8     LIMITATION TO THE METHODOLOGY

CHAPTER FOUR

DATA ANALYSIS

4.1    BRIEF INTRODUCTION OF THE CHAPTER

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1    SUMMARY

5.2    CONCLUSION

 5.3   RECOMMENDATION

APPENDIX: QUESTIONNAIRE

CHAPTER ONE

1.0 INTRODUCTION

This study would discuss the basics of Investment Analysis and Portfolio Strategy using Wema Bank Plc as a case. Investment represents the incremental cash outlay required to install a machine, build a plant or whatever the capital investment involves for example, the cash outlay for a new machine to reduce labour costs would involve the purchase price of the equipment, the freight in and the cost of installation and start-up. On the other hand, a portfolio describes the collection of different investments that make up an investor’s total of investments.

A portfolio might refer to either:

The investment in stocks and shares by an investor, or the investments in capital projects by a company. In this era of sophisticated business environment there is need for proper monitoring of investments. Doing proper analysis of the investment, more so, for good investment evaluation from time to time the portfolio needs to be given attention, can do this.

In other words, an investor must be interested in the correlation situation of the investments, which, is how strong is the relationship between the variable.

That is, the returns of the investments on hand. For instance, a case of two investments on hand, considering correlation here, refers to a measurement of how strong the connecting is between the two variables. It must have high positive correlation, which means that both investments tends to show increase (or decrease) as opined by Aminu Nurudeen (2000), in returns at the same time.

As a  result of the sophisticated business environment we operates in, it is highly necessary that portfolio strategy should be given good consideration. This goes a long way to complement investment analysis. For investment to really make a worth, or to meet the target set by the investor, there would be need for portfolio diversification. The investors need to strategize as the situation in the business environment presents itself.

1.2 STATEMENT OF THE PROBLEM

Business environment is only worthwhile if there are viable investments to make it function as it should. But because of the changing feature of the medium it has posed challenges to individual investor to really analyse his/her investment. Moreover, the situation of the country also stand as another factor that necessitate proper portfolio strategy, sot that as the challenges presents themselves it will not have adverse effect on the investments. So to this end, the challenges range from the political situation in the country; the inadequate competent investment analyst; and other vices.

1.3 OBJECTIVE OF THE STUDY

The aim and objective of this study is to critically examine the features of investment analysis and how operative is portfolio strategy. The study is intended to proffer solution to some of the problems militating against good return on investments. The study would also be an eye opener for intending investors, assisting them to see the whole venture in black and white.

1.4 SCOPE OF THE STUDY

The study would deliberate on types of risk in investment and how to manage it. Moreover, it would examine the strategies available and how they could be implemented with regards to different business environments. The study would also examine the government policies or contribution to promote favourable environment for the economic viable investment. It would analyze different portfolio risks as presented by the operating environment.

1.5 SIGNIFICANCE OF THE STUDY

The importance of this study cannot be over emphasized. There is need to examine the ample benefits in portfolio strategies as it relates to proper investment analyses.

Moreso, as the business environment is changing there is a greater need for investors, investment analyst and other stakeholders in this spheres to be sensitize as to what steps to take as all these business changes unveils.

1.6 RESEARCH QUESTIONS

In the course of this study, various research questions would be put forward; these are in live with the topic under research. These include:

1.  What is the benefit of Investment Analysis?

2.  What is portfolio risk?

3.  What is risk management?

4.  What is portfolio strategy?

5.  What are the challenges of the business environment to the investment analysis?

Hypothesis One

H₀:   Investment Analysis is profitable

H₁:   Investment Analysis is not profitable                 

Hypothesis Two

H₀:   Portfolio risk is inevitable.

H₁:   Portfolio risk is not inevitable.

Hypothesis Three

H₀:   Portfolio Strategies is necessary to make portfolio returns.

H₁:   Portfolio Strategies is not necessary to make portfolio returns.

1.7 LIMITATION OF THE STUDY

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