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portfolio theory state when an individual invest in diversified portfolio the
expected risk that will happen will be lower, this hypothesis was first
introduced by Harry Markowitz in his paper “Portfolio Selection,”
(published in 1952 by the Journal of Finance), but before that the Harvard Ph.D.
graduate  John Burr Williams published a
book that recorded accurately the general thinking at that time the   objective of most finance specialists was to discover a great stock and purchase it at
the best price “The Theory of Investment Value. Harvard University Press 1938”.

management theory is a professional service based on creating an efficient
frontier of ideal portfolios, to get the greatest conceivable anticipated
return for a given level of risk of the individual or companies by diversifying
the client investment among different stocks and other assets,

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portfolio is different from the other due to a lot of constraints and  Psychographic classifications which are
connected to the investor experience, how did he accumulate his wealth and his
occupation which can be a considerable role in the asset allocation process
like considering in the client risk tolerance, time horizon, and returns goals.
It can be a retirement plan, paying for kid’s tuition, buying a house or a car
or just simply making more money, in this process the portfolio manager will
make sure of the main  key elements
firstly is to understand the violatilty of the assets are different and that
they don’t move in the same direction and to modify the risk to earn more
stable return, e.g investing in a high and low-risk assets like stocks and
bonds so when one speculation drop the other may increment, offsetting the loss
this process is called asset allocation

In this report,
I will show the assets that I have chosen and explain the process in detailed instructions how to construct an efficient frontier to get the maximum return
from these stocks



Direct line


General electric

Intel c





energy service

multi-industry company

technology company 

technology company 


The main goal of choosing the following
stocks is to  direstify the portfolio by
selecting companies from different sectors and markets from FTSE 100 and
Dowjones with the highest market capital with best-performing
stocks to get higher return, Vodafon one the largest telcommation provider, EasyJet
from aviation, Directline one the biggist insurance companies in the United
kingdom, Centrica utility
company that’s provide it’s elecricty and gas for the people in UK and scotland
and from US market dow Jones index I picked the Multi-operating companies Like
Genaral Electric as Multi-industy conglomerate it operates in a lot of
segments some of them are Aviation Digital, Oil and Gas, Lighting and last but
not least Medical devices this is just a few
of the sectors that General Electric operates
in on the other hand the other two
companies are competitor in the technology sector Inter corp. and Microsoft as
the largest computers software and hardware provider if one they operate badly this will lead to increase
in the other stocks price which will offset the losses 

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