Question

If you have $100,000 to invest in the share market today, how would you invest? Please describe your approach in general and explain the relevant finance concepts/theories you have applied. Your answer should be based on what you have learned in this course (no further research is required). You do not need to specify the exact stocks you will invest in (write no more than 200 words).

Answer 1

If I will have 100000 dollars to invest into the share market, I would be investing in those companies who are mostly undervalued because I am a highly conservative investor and I will having a very low risk tolerance and I will not prefer high risk stock in my portfolio.

I am more focused towards investment into those companies who are not the taste of the market right now, because these shares who are trading at a very high price to earning multiples have discounted their futuristic earnings in their price and they do not have upside in coming years.

I am mostly looking for shares who are having a lower valuation and which are not the current taste of the market and which are mostly defensive in nature and low beta stocks, so I will be trying to capitalise between the price and the value of the share and I will try to maximize my overall return when this euphoria is over and I am not getting myself stuck, because I will be mostly invested into the defensive stocks.

So, my portfolio will mostly be consisting of Pharmaceutical stocks and retailers except Amazon.