1. Which type of stock or combination of stocks would be appropriate for Shannel? Develop your answer...

Question:

1. Which type of stock or combination of would be appropriate for Shannel? Develop your answer in terms of Shannel's risk tolerance, time frame, and goals.
2. What role should cyclical and defensive play in Shannel's portfolio?
3. Would you recommend small-capitalization to Shannel? Why or why not?
4. Given Shannel's fear about current stock valuations, what investment strategy would you recommend for her? Why?
5. Why might Shannel consider enrolling in an automatic investment plan that uses dollar cost averaging?
6. Provide Shannel with four reasons to consider using a buy-and-hold strategy.
7. Explain a reinvestment plan to Shannel. Would you recommend that she participate in DRIPs with a portion of her portfolio? If so, how much and why?
Although saddened by the death of her favorite aunt, Shannel was extremely surprised to learn that she was named her aunt's only heir. A personal note in the will said, "For your own shop." Shannel and her aunt often visited antique shops, and Shannel's dream was to own such a shop. She is expecting to receive approximately $50,000 and hopes to invest this money for her future shop, but she knows very little about or investment strategies. After discussing financial planning topics with Shannel, the following issues became clear. First, the $50,000 is all the money she has saved for her goal. Second, Shannel is very cautious financially and is fearful of investing all her money at once because she has heard conflicting reports concerning stock valuation. Use your knowledge of classifications and investment strategies to answer the following questions. Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...