I have to do this project but am so lost...what can I write a policy statement about? What are some examples of what I c

[answerhappygod]

I have to do this project but am so lost...what can I write apolicy statement about? What are some examples of what I can investin?
The Investment project is a portfolio management exercise. Each student first, constructs a policy statement in which he(she) specifies his (her) investment objective in terms of risk andreturn. The student then states his (her) return objectives interms of an absolute or relative percentage return, or in terms ofa general goal, such as capital appreciation, capital preservation,current income or total return. The student also specifies thetypes of risks he (she) is willing to take.
For example, you may set your objective to earn 10%above the market return. This would imply that your portfolio riskwould be slightly above the market risk. Your portfolio beta willbe slightly above 1 (the market beta).
If you set your objective as capital appreciation, yourinvestment will be mostly in high growth companies that does notpay dividends. Your portfolio will include high growth companiesand small capitalization stocks and will have a higher beta thanthe market.
If you chose capital preservation as your goal, you willinvest in low risk (low beta) companies these will be mostly largeand stable companies
If you chose current income as your objective, thestocks in your portfolio will be for companies that pay highdividends.
In the second step of the exercise the student studies thefinancial and economic conditions then determine his (her)investment strategy based on those conditions.
You will examine the current economic, financial andpolitical environment and decide on which industries are best toinvest in under the current conditions. For example, if oil pricesgo up you will invest more in oil companies and avoid airlines andtrucking companies. If interest rates are expected to go up, youwould you would invest more in banks and other financialinstitutions. You would also look at other micro events relating tosome industries or companies, for example if a company introduces anew product that is received well by the consumers, you would liketo invest in that company.
In the third step of the portfolio management process thestudent constructs his (her) portfolios on Cnnmoney.com oryahoo.com. or any The student decides on what assetclasses to consider for investment, the policy weights to assign toeach asset class, and the specific securities to purchase for theportfolio. The students then perform portfolio analysis toensure that the asset allocation process is consistent with theobjectives stated in his (her) policy statements.
You now will select the stocks that you will include inyour portfolio and decide on the allocation to each stock. You mayhave equal allocation to each stock (like three percent of youinvested money in each stock). I am giving your $100,000 to invest.This means you will invest about $3000 in each stock. You mayoverweight (put more than 3%) some of the stock that you think willdo very well and underweight (put less than 3%) in the ones thatyou think are not going to be as good as the highperformers.
The fourth step in the portfolio management process is themonitoring and updating of the investment needs and marketconditions. A major component of the monitoring process isevaluation of the portfolio performance and comparing the resultsto the expectations listed in the policy statement.
You want to make sure your choices are consistent withyour goals. Do not worry about making or losing money at this time.Build your portfolio with the intention of keeping it for a longperiod of time
The student will then prepare an 8 to 10 pages’ reportIncluding any exhibits. In the project report the student discusseshow he (she) applied the four steps in the investment management toconstruct monitor and manage his (her) portfolio.
In your report you briefly talk about your investmentobjectives, the stocks you selected and why did you select each ofthese stocks and how these choices are consistent with yourinvestment goals.