Construct a month by month index for the share portfolio

Question

Performance of an Investment

Introduction

On the 1^st of July 2012 Tom had a $30 000 windfall, and decided to invest all of this money by purchasing shares in a number of companies listed on the ASX.  Decide, with reasons, on the companies Tom invested in, and then access the price he paid for these shares eight months ago.

Investigate the growth, or otherwise, of Tom's investment and compare the performance in the share values of each of the selected companies against appropriate market indicators.

Mathematical Investigations

Using ET where appropriate, investigate the profitability of the investment by calculating:

• the total purchase price of the shares at their market value on 1^st July 2012
• the break-even price for each company
• the return from any dividends issued within the last 12 months of ownership
• the return from any other issues that occurred, e.g. rights or bonus issues, within the 12 months
• the return on selling the shares at the current market value and therefore any profit or loss
• the appropriate taxation obligations
• any other useful mathematical information.

Construct a month by month index for the share portfolio, and graphically compare its performance to the All Ordinaries Index and other relevant market indicators.

Analysis/Discussion

Analyse the quality of the investment decisions Tom made.  You may wish to consider:

• the performance of each of the selected companies and discussion of any identifiable reasons
• the profitability of Tom's investment
• the performance of each company against an appropriate market indicator
• any assumptions made and limitations of the investigation.