Future Plans

The second and last action project for my STEAM course, Economics, we were asked to create a financial portfolio. Throughout this unit, we learned quite a lot about the difference between a good stock and bad stock. We were specifically given a figurative amount of approximately $50 thousand to invest into stocks and bonds over a certain span of years. I ended up choosing Dollar Tree and Ulta because I used these companies' products a lot growing up, and I really remember their name more than most other companies. We also had to invest our money and set our goals pertaining to the SMART rule; Specific, Measurable, Attainable/Achievable, Relevant/Reasonable, Time-bound. This project was very heavy and it was not easy to fully understand what I had to do, but I got through it! I would say that my favorite part was studying the stocks and comparing their recent and not-so-recent activity to help me choose which stocks I wanted to invest in. I hope you enjoy looking at my project as much as I enjoyed creating it for you!

For this project, we had to really analyze the market to determine what companies we wanted to invest our financial life into. I am not scared of a little risk; no one should be. According to the Investment Risk Tolerance Quiz, I have a high-risk tolerance. The results are below:

The scenario given to us is as follows: "18 years ago, your guardian angel set up a college savings plan for you with an initial investment of $8,500. Your angel contributed $50 each month to the college savings plan ($600 yearly). After 18 years at an average annual interest rate of 7%, compounded annually, the plan is now worth a hefty lump sum. Yesterday, you cashed out your plan and deposited the money in a brokerage account to invest on your own." My SMART goals are presented below:

• 1-year goal: Go on a trip with my closest friends to California before college departure ($2,500)

• 5-year goal: Move into a place I can call my own ($80,000) 

• 25-year goal: Have accumulated money for over 24 years and I wish to be debt free and have money to open up my own recording studio ($1,000,000)

What drew me to these companies the most, is that they stay out of the news, and it doesn't seem like they put their workers through harsh conditions. I choose morality over profit when investing in companies because I wouldn't want to be a part of something whereas I can't sleep at night, but I'm making money. I love a business that is for the people and not just for the profit, although I still love the profit.

Dollar Tree:I chose Dollar Tree because it's prominently known in the neighborhood I live in. The economic moat of Dollar Tree is their ability to maintain $1 prices throughout their stores. Centered in tough parts of the city, aiming to help people with less money and are very useful for those with money as well. $1 prices are always great for everyone! Dollar Tree, with an estimated 2016 growth of 40.7%, is well known for it's exceptionally reasonable prices and will never fail to impress the stock market. Nothing but growth in the near future!

Ulta: I chose Ulta because they have a large brand, and are known around the world as the cosmetics brand. Growing up, all I saw was Ulta brand cosmetics. Makeup will never die. I only see this company expanding from now on. Ulta has a projected 2016 growth of 18%, and they have an annual revenue of over $3.5 billion dollars!

One of the most important things in this business is the profit. My Return On Investment (ROI) is presented below:

For one year:

(Total: $2,548.65)'

21 shares of DLTR for $1,579.41  ($75.21 each stock) 62%

4 shares of ULTA for $969.24  ($242.31 each stock) 38%

ROI:

.62 x .2829 +

.38 x .1877

=.246724

=24.7%

total x 1.247 = $3,178.17

For five years:

(Total: $14,430.22)

46 shares of DLTR for $3,459.66 24%

45 shares of ULTA for $10,903.95 76%

ROI:

.24 x .2829 +

.76 x .1877

=.210548

=21.1%

total(1.211)5th power = 1.62961673e21

For twenty-five years: 

(Total: $32,216.51)

41 shares of DLTR for $3,083.61 10%

120 shares of ULTA for $29,077.20 90%

ROI:

.10 x .2829 +

.90 x .1877

=.19722

=19.7%

total(1.197)25th power = 4.51144909e114

With a leftover amount of $55.70.

There's something called a stock sector. A stock sector is how we organize different companies into categories, such as Disney being an entertainment company, etc. I chose to focus on primely retail trade stock sectors. I love the retail business. I think the idea of creating stuff cheap and selling it higher, is smart because if people need it, they will buy it, regardless of the price it cost to create that good.

References:

"Dollar Tree, Inc." NASDAQ.com. N.p., n.d. Web. 29 Oct. 2016. Staff, Investopedia. 

"How To Use The P/E Ratio And PEG To Tell A Stock's Future." Investopedia. N.p., 2016. Web. 29 Oct. 2016.

"Ulta Salon Cosmetics & Fragran." Vuru. N.p., n.d. Web. 29 Oct. 2016.

"Our Story – ULTA Beauty Careers." Our Story – ULTA Beauty Careers. N.p., n.d. Web. 29 Oct. 2016.

"DollarTree.com." Dollar Tree, Inc.: Floral Supplies, Party Supplies, Cleaning Supplies. N.p., n.d. Web. 29 Oct. 2016.

"The Dollar Tree" Vuru. N.p., n.d. Web. 29 Oct. 2016.