Investment Strategy Essay Example | Topics and Well Written Essays - 2750 words

Investment Strategy - Essay Example The investment idea was ‘shorts’. Market sentiments are positive for JPM and investors are expecting share prices of JPM to appreciate the trending market movements. The detailed observation and evaluation by the Chairman and CEO are discussed in the annual report of the company under the â€Å"Management Discussion and Analysis† section. Both of them has concluded that internal control and procedures were effective during the financial year 2013. The financial statement of the company aims to provide information about enterprise’s financial position on a given date. Technical analysis involves identifying patterns or trends in the movements of stock prices at an earlier stage and then device an appropriate strategy with the objective to benefit from such market movements. The technical of JPM suggests that its stock prices are currently experiencing up-trends. A bullish market sentiment and better job creation report along with better economic growth could be the probable reason for the same. The investment decision of an individual depends on certain factors like economic conditions, return on investment, the attractiveness of security, time horizon, and business outlook. An investor has the option to invest his/her savings in stock markets which provides an opportunity to maximize returns by identifying market trends. The investment idea can generally be classified as ‘turnaround’ or ‘short-sale’ investment strategy. The former strategy focus on particular sector or stocks that are currently not attractive to other investors. The technical chart of such stocks reveals that they are sellers’ favorite and are probably oversold at the moment. The key to success in ‘turnaround’ strategy is to observe the chart very carefully and determine whether the worst is over or not. By analyzing the fundamentals of the underlying asset, the analyst could tell whether the stock is left for dead or a possible turnaround is apparent in near future.