Reflection

When I first began this project, I had a very vague understanding of how stocks functioned and kept the economy running. While much of the economic process remains a mystery, I did gain a better understanding of how the stock market works and why it behaves so unpredictably. I first became interested in stocks when my sister and I discussed the potential behind MetroPCS (we could have earned a bit of cash had we invested), but potential is only one piece to the overly complex puzzle. In my econ and government classes we learned a bit more about what makes a market tick, such as political and world news as well as general public opinion and interests. After meeting with my mentor, Patrick Cross, a financial adviser with Edward Jones, I was able to grasp the concept of portfolio based investments. Having a portfolio can meet the financial goals and needs of any individual who wishes to invest in their future, but much like every individual is unique in their goals and finances, each portfolio is tailor made to suit each person. Among the factors that go into portfolio building are age, income, goals and behavior (risk-taker or conservative). Being a relatively young investor, I decided to focus my portfolio on aggressive growth, which Patrick advised against. In my efforts to meet my growth goals, I neglected to factor in dividend yield when purchasing stock until the very end of this project. Although I did have a net gain in the end, had I begun investing sooner and smarter, dividends from a growth & income based portfolio (mine was mainly growth), would have been paid off around March, giving me a periodic income.Over the course of my research, I noticed the details that went into daily market analysis to determine a stock's strength, including new management, product announcements and rumors, all of which should be taken with a grain of salt until a final judgment can be made either by the investor or their adviser. One thing any investor will tell you, is that there is always risk involved, but there are tools and strategies to help reduce that risk exponentially. The easiest road to take is to make safe investments with companies that are known to perform well and offer dividends, such as McDonalds or Coca-Cola. However, if you do your research and pay attention to key movements, in the market and in the world, including market gaps (which indicate potential growth or downturns) and general public behavior such as Spring cleaning, which could drive up demand for Johnson & Johnson cleaning products, your investment path could be laid out right in front of you, waiting to turn a $5 investment into a $100 profit, if you are patient and/or make the right moves. I feel this experience has taught me a lot about how to manage finances and could be a stepping stone toward a career in the economic field.

Last Market Updates

This stock experiment is coming to an end along with the school year, so this will be my final blog entry regarding the market. Recently acquired company, ConocoPhillips, nears its 52-week high so it's a perfect time for final calculations and sales. Not much else has been in the news except Pfizer (PFE) and their drug announcements to be finalized at a rheumatism conference.

Final Totals for May 14, 2013:

• BioDelivery Sciences International (BDSI)- Open $5.19 Close $5.09
• Total for 230 shares: $1,170.70 ($23 loss)

• T-Mobile (TMUS)- Open $18.91 Close $18.98
• Total for 26 shares: $493.48 ($1.56 gain)

• Rambus Inc. (RMBS)- Open $8.11 Close $7.96
• Total for 150 shares: $1,194 ($16.50 loss)

• ConocoPhillips (COP)- Open $61.96 Close $63.06
• Total for 50 shares: $3,153 ($53 gain)

• Pfizer Inc. (PFE)- Open $29.35 Close $29.40 
• Total for 65 shares: $1,911 ($1.95 gain)

• Treasury Bond- $2,000

My portfolio for the day of May 14, 2013, saw a total gain of $17.01. After "selling" all my investment assets, I would currently be in possession of approximately $9,922.18 which added to my cash on the side would equal $10,099.06 for a total profit of $99.06 (not including accumulated interest on the treasury bond) over the course of approximately a month and a half. 

Final Mentor Meeting

Although my mentor, Patrick Cross would not have made many of the investments that I have over the course of this project, he was impressed with my thought process for doing so, including the use of market gaps and news for better understanding of a company' potential and inner workings. For example, BioDelivery Sciences (BDSI), just released their quarterly reports (here) which indicate approximately $12 million used for research and trials of drugs including one to treat chronic pain and one for opioid dependence. Meanwhile, the MetroPCS/T-Mobile merger has become a big business success as the deal cuts debt for Metro shareholders while T-Mobile makes up some ground after losing a large percentage of customers in recent months; article here.

Totals for May 13:

• BioDelivery Sciences International (BDSI)- Open $5.13 Close $5.19
• Total for 230 shares: $1,193.70 ($9.30 gain)

• T-Mobile (TMUS)- Open $19 Close $18.92
• Total for 26 shares: $491.92 ($7.28 gain)

• Rambus Inc. (RMBS)- Open $8.00 Close $8.07
• Total for 150 shares: $1,210.50 ($9 gain)

• ConocoPhillips (COP)- Open $62.11 Close $62.00
• Total for 50 shares: $3,100 ($11.50 loss)

• Pfizer Inc. (PFE)- Open $28.75 Close $29.37
• Total for 65 shares: $1,909.05 ($44.20 gain)

As the project draws to a close, I think May 14th will be the last day to cover the market and make my final tallies. For May 13th, however, I walk away with a $58.28 market gain and feeling confident. There still remains $176.88 of cash on the side, so that will just be added to my final sum from Tuesday.

Back From Outdoor Ed

I haven't had much time to keep up with stocks or news due to my Outdoor Ed trip, so all I can do at the moment is present current stock standings as well as those for new purchases. I will meet with my mentor on Monday to present to him a more balanced and dividend yielding portfolio, rather than one full of risky investments.

Totals for May 10, 2013:

• BioDelivery Sciences International (BDSI)- Open $5.06 Close $5.15
• Total for 230 shares: $1,184.5

• T-Mobile (TMUS)- Open $18.12 Close $18.64
• Total for 26 shares: $484.64

• Rambus Inc. (RMBS)- Open $7.69 Close $8.01
• Total for 150 shares: $1,201.50

• ConocoPhillips (COP)- Last Price $62.23
• Purchase 50 shares: Total= $3,111.50
• Expensive, but has up to 4.24% dividends every three months

• Pfizer Inc. (PFE)- Last Price $28.69
• Purchase 65 shares: Total= $1,864.85
• Company has 3.3% dividend every three months

• Treasury Bond: $2,000

After purchasing some dividend yielding stocks, my total cash dropped from $5,153.23 to $176.88. Thanks to dividends, this number will grow every three months as companies reward their investors periodically. I currently have $9,846.99 in invested assets, including the treasury bond which totals $10,023.87, a gain of $23.87 over the course of the project. 

Mentor Overview

Yesterday, I met with my mentor, Patrick Cross for approximately one hour. Before I began asking for financial advice, we discussed the progress that I had made on my own since beginning this project. He said that I had fared well on my own, but did make some moves that could be considered unwise in his profession and he would more than likely not recommend. Among these were the purchase of gold-based companies (AEM) and investing in stocks that don't offer dividends, such as Netflix, on which we both agreed, that purchase was extremely lucky. From there, we discussed a new direction for my portfolio, investing in safer, dividend paying companies such as Chevron, McDonalds or Coca-Cola and selling aggressive stocks such as Netflix.

Totals for May 2nd:

• Agnico-Eagle Mines (AEM)- Open $31.89 Close $31.98
• Total for 50 shares: $1599 ($22 gain since May 1st)
• Sell 50 shares, receive $1,399 after fees.

• BioDelivery Sciences International (BDSI)- Open $5.47 Close $5.48
• Total for 230 shares: $1,260.40 ($2.30 gain)

• MetroPCS (PCS); becomes T-Mobile (TMUS)- PCS $11.84 TMUS 17.72
• Total for 51 shares: $903.72 ($299.88 gain)
• Sell 25 shares, receive $443
• Total for 26 shares: $460.72

• Netflix (NFLX)- Open $212.91 Close $214.49
• Total for 5 shares: $1,072.45 ($7.90 gain)
• Sell 5 shares, receive $1,072.45

• Rambus Inc. (RMBS)- Open $6.83 Close $6.93
• Total for 150 shares: $1,039.50 ($15 gain)

• Treasury Bond: $2,000

After getting advice from my mentor on these stocks, I decided to sell Netflix and AEM which he considered aggressive stocks with high risk and no periodic dividend. The great increase in price after the T-Mobile acquisition made me sell about half of my, then, MetroPCS stock for a profit. I currently have $5,153.23 to play with; I will make new purchases after the weekend bell. After some calculation, I have reached a net loss of $86.15 since starting this project with $10,000.

May 1st, Fresh Start?

"Gold stocks on the move;" despite a prospective drop in the expected price of AEM from $54 to $39, the market has been in favor of gold. Although this particular stock has created a loss in my investments, I will wait until I consult my financial adviser, Patrick Cross, before making any moves. As T-Mobile closes its acquisition of MetroPCS, I can expect a soaring price which may close my business with them after turning a profit, details here. There has been little other news that has shaken overall stock prices.

Totals for May 1st (Since April 29th):

• Agnico-Eagle Mines (AEM)- Open $31.40 Close $31.54
• Total for 50 shares: $1,577 ($7 gain)

• BioDelivery Sciences International (BDSI)- Open $5.66 Close $$5.47
• Total for 230 shares: $1,258.10 ($43.70 loss)
• MetroPCS (PCS)- Open $16.29 Close $16.50 Previous Close $11.84
• Total for 51 shares: $841.50 ($237.66 gain since April 30)

• Netflix (NFLX)- Open $215.66 Close $212.84
• Total for 5 shares: $1,064.20 ($14.10 loss)

• Rambus Inc. (RMBS)- Open $6.96 Close $6.84
• Total for 150 shares: $1,026 ($18 loss)

I will be meeting with my mentor later today to discuss my investment progress. In short, I believe I've done well so far for a first-timer, but that remains to be seen. After consulting Mr. Cross, I may lose some holds and/or gain others. That remains to be seen.