Investing In Australian Equity Market: Summary And Portfolio Analysis

Global, Economic and Industry Environments for Australian Equity Market

The current Global Position for equity market is relatively adequate, which would eventually help the companies to maximize their profitability during the fiscal year. The stability in the financial sector of the world is seen, which a positive attribute for the equity sector of Australia is. Moreover, the current economic position of Australia is a relatively adequate for companies, as the government is thinking to reduce the corporate tax which will enable hair growth for the organisation. The company would be able to generate higher income and retain more profits if the Australian government passes the relevant loss. Furthermore, the industrial environment is relatively competitive, which is allowing the organisations to improve their operations and increase profitability in the long run. Therefore, after evaluating all the relevant factors it could be identified that the current investment market of the Australian equity is adequate, which could allow investors to generate higher rate of returns from investment. The drafted portfolio would eventually provide higher returns from investment due to the presence of positive attributes in the Australian equity market (Bhatia and Kishor 2015).

The calculation conducted in the above table relatively represents the changing portfolio value from $1.5 million to $1.76 million within the time span of 3 months. During the three month period the overall portfolio value relatively increased due to investments conducted in particular stock. the overall portfolio relatively has stocks from the ASX 200 equity index, which eventually increases the overall returns from investment. The drafted portfolio has performed adequately while providing higher rate of returns from investment. Bhatta, Marshall and Thapa (2018) mentioned that with an adequate portfolio investor are able to maximize the profit while minimising the chance of loss from investment. The above creative portfolio relatively consists of stocks from equity which are bought and sold simultaneously, while relevant purchase of future contract is also conducted with LICs and ETPs. The composition of the relevant stock and hedging position as a relatively allowed the portfolio to outperform and maximize the profit from investment.

With the help of an adequate investment scope a Portfolio was created, which relatively generated higher rate of returns from investment. The investment scope used during the portfolio creation is the 10-day moving average and 50 day moving average crossovers. This relatively helped in detecting the investment opportunities, which has an uptrend. Moreover, the investments cooperatively help in identifying different stocks in the equity market which could be used for investment purpose and generate higher rate of returns from investment. From the evaluation it could be identified that during the three-month period overall use of Technical Analysis was adequate, as the portfolio has generated adequate Returns during the investment period. The portfolio has improved from the levels of 1.5 million to 1.76 million in a span of 3 months, which directly indicates the positive attributes of the investment scope used during the portfolio creation. Therefore, the overall investment scope used in the creation of the portfolio was relatively adequate, which would eventually help in generating high rate of returns from investment. Moreover, with the help of technical analysis investors able to detect investment opportunities and improve the returns from investment. (Cao and Ward 2014)

Analysis of investment Portfolio

The calculation conducted in the above table relatively compares the overall performance of the portfolio with ASX 200 Index, which eventually help in detecting the effectiveness of the creative portfolio. From the calculation it will be identified that the portfolio provides the total return of 17.38%, while the index return is relatively at the levels of 1.63%. The effectiveness of the portfolio is a relatively depicted as compared to the index, which would eventually allow investors to generate higher rate of returns from investment. During the three-month period the overall investment in the portfolio generated higher returns of 17.38% due to the investment scope used in drafting the overall portfolio. In this context, Dull, Konig and Ohls (2017) stated that investors with the help of effective portfolio is able to maximise the level of returns, which could be generated from investment.

The portfolio created in the above assessment relatively in the case of positive attribute to the investment score, which directly indicates the high returns that will be generated from investment. The calculation directly indicates that no changes or alteration is needed in the particular portfolio, as it has outperformed the market and generated higher rate of returns from investment. The creative portfolio also allowed in segregating equity sector with the futures market to maximize the level of process that will be generated from an investment. Furthermore, the use of equity, shorting, and futures contract has allowed the portfolio to generate higher returns of 17.38%. Hence, the created portfolio would eventually help in generating higher rate of returns for investors while reducing the risk from investment.

Reference

Au.finance.yahoo.com. (2018). Yahoo is now a part of Oath. [online] Available at: https://au.finance.yahoo.com/ [Accessed 13 Jun. 2018].

Bhatia, A. and Kishor, N., 2015. Linkages of Foreign Portfolio Investments and Stock Market Indices: Evidence from BRICS Nations. Journal of Poverty, Investment and Development, 19, pp.1-21.

Bhatta, B., Marshall, A. and Thapa, C., 2018. Foreign bias in bond portfolio investments: the role of economic and non-economic factors and the impact of the global financial and sovereign debt crises. The European Journal of Finance, 24(7-8), pp.654-681.

Cao, X. and Ward, M.D., 2014. Do democracies attract portfolio investment? Transnational portfolio investments modeled as dynamic network. International Interactions, 40(2), pp.216-245.

Düll, R., König, F. and Ohls, J., 2017. On the exposure of insurance companies to sovereign risk—Portfolio investments and market forces. Journal of Financial Stability, 31, pp.93-106.

Lahr, H. and Mina, A., 2016. Venture capital investments and the technological performance of portfolio firms. Research Policy, 45(1), pp.303-318.

Lee, S., 2016. Geography of cross-border portfolio investments and ICT diffusion. International Review of Economics & Finance, 45, pp.540-552.

Varughese, A. and Mathew, T., 2017. Asymmetric Volatility of the Indian Stock Market and Foreign Portfolio Investments: An Empirical Study. Indian Journal of Finance, 11(6), pp.36-49.