Select a portfolio of 8 stocks that you believe will outperform the S&P500 index.
To improve diversification, pick each stock from a different sector. The following article provides guidance in this area: https://www.investopedia.com/university/simulator/diversified-portfolio.asp
On a single spreadsheet, for each stock, identify the following data points: (all are available from: finance.yahoo.com)
- Stock Name
- Ticker Symbol
- Price
- Market Capitalization
- P/E Ratio (Trailing 12 months "ttm")
- Beta
- Book Value
- 52 Week % Price Change
1. Based on this information, are any of the stocks you selected "riskier" than you originally thought?
2. What do you notice about P/E ratios indifferent sectors?
3. Why is combining stocks from different sectors a better approach than building a portfolio entirely of stocks from one sector?