Stocks

Continually analyzing the stocks go up and down with the market was very interesting to watch. We happened to pick three stocks that actually had a relatively high scouting report which tended to spike and drop week to week. If you look at the attached map of the percent return on each investment, it is obvious to see that the stocks started out relatively quite and then all of a sudden dropped in value along with the S&P500 index level. However, they quickly recovered and began earning positive points. The graph does a great job showing the up and down trends in the week to week analysis and also makes it easier to understand the relation of the beta to the investments.

When choosing three particular stocks to invest, we decided that it would be the best to try to get a smaller return with a relatively stable investment then risking all the money on some unstable and streaky company. When choosing CAT, NUE, and QCOM, we knew that they would not necessarily double or triple our money in the two months we had to invest. However, we knew that they are all very stable companies based on the recorded betas advertised on the internet. This relatively stable number represents how much the stock would go up or down with the market. So if the market next week does badly, then CAT with a beta of 1.09, would hardly fluctuate with the market. However, if the beta had been a 2 or 3, similar to Nucor, the company’s stock price would heavily fluctuate as the market goes up or down. Looking at the prices of the shares over the two months, we find that if we had