Investment Memorandum

Investment Memorandum (20%). Using the first three steps in the Investment Process as discussed during our first class, select no less than three stocks (i.e., equities) and no more than six stocks that you think will be able to outperform the Standard & Poor’s 500 over the next five years. You must fully justify each step in the process. You have a total of $100,000 to invest. The three steps are:?Step 1: Asset Allocationo Discuss Macroeconomic Factors (i.e. the Economy).o Justify your percent of Portfolio in Stocks, Bonds, and Cash. Must total to 100%/$100,000. o You must have a percentage in these three asset classes: Stocks, Bonds, and Cash.o Example: Stocks 55% ($55,000), Bonds 35% ($35,000), Cash 10% ($10,000).?Step 2: Industry Allocation (Equities Only)oYou must select at least two different Industries (e.g., Internet, Retail Store).o Justify percent of Equities in each Industry you select. Must total to 100%.o Example: Internet 35%, Retail Store 40%, Publishing 25%. Total 100%.o If you had chosen 55% stocks, then you have $55,000 with $19,250 (35%) in the Internet, $22,000 (40%) in Retail Store, and $13,750 (25%) in Publishing stocks. Total: $55,000.? Step 3: Stock (Equity) SelectionoSelect three to six stocks, provide Ticker Symbols. Justify each stock selection.o Stocks mean Stocks. No Mutual Funds or Exchange Traded Funds (ETFs).o Provide number of shares in each stock and price. o In this example, all stocks selected must total to $55,000.Your Memorandum must be typewritten, limited to a maximum of four (4) pages, double-spaced, one inch margins. Number your pages. References must be included on a separate page and do not count against the four-page limit. Tables/Figures do not count against the four-page limit. You must team with one another