13
White Sapphire Investment Corp. White Sapphire Investment Corp Invest in your future. Amia Ross, Alex Dortzbach, and Shaan Patel

Prospectus - Google Docs

Embed Size (px)

Citation preview

  White Sapphire Investment Corp.   

  

  

White Sapphire Investment Corp  Invest in your future.    Amia Ross, Alex Dortzbach, and Shaan Patel      

  

Prospectus 

Investment Strategy Strategy We want to achieve our goal by investing mainly in stocks, but also investing in real estate, bonds, and cash investments. We are diversifying by investing in numerous stocks and bonds to reduce risk of one investment in particular failing. We will invest in some up-and-coming neighborhoods, but also established resort cities. Always keeping some money in cash investments will ensure that the money keeps pace with in�ation. Overall, we want this to provide a 100% return over the ten year period. However, we will take 5% of all pro�ts made. 

Goals   Our goal as an investment group is to assist in creating the beginnings of retirement savings for someone who has already started out in life but still has 15-20 years left before they do retire.  

Startup Information Our startup minimum is $25,000, and the required amount of money for each additional year is $2,500. If someone pulls their money out in the �rst �ve years, the penalty is 25% of what they already put in. However, if they choose to pull out their money after the �rst �ve years, the penalty is only 5%. We want our plan to be �exible with the amount of time clients wish to invest their money, but we do recommend that clients keep their money in our corporation for the full 10 years for maximum return, as the plan is designed for a 10 year period. 

 Investment Types:  Our investment strategy mainly deals with these four types of Investments: 

1. Stocks- 45% 2. Bonds- 15% 3. Real Estate- 25% 4. Cash Investments- 15% 

 

 

Stocks We invest in stocks that are �rmly planted in their industry, sell popular products, and are on the rise. All stocks have relatively low betas (under 1.25), have low-medium P/E ratios, and have a dividend & yield of at least 2%, with the exception of a minimal number of stocks. Our stocks are diverse; we usually do not invest in two stocks belonging to the same industry. Our main stock investment strategy is to use dollar cost averaging, at regular intervals of every year.        

Here are the stocks we invest in:  

❏ Exxon (XOM) ❏ Oil and gas stocks are steadily rising ❏ As of March 2014, Exxon-Mobil was the third largest oil and 

gas company in the world ❏ Revenue of $420 billion ❏ Has a .89 beta, low-medium risk ❏ Div & Yield of 2.70%, nice return 

❏ Coca-Cola Company (KO) ❏ Leading beverage company in the world ❏ Creating new, healthier drinks that we 

predict will be successful ❏ Has a .34 beta, very low risk ❏ Div & Yield of 2.90%, nice return ❏ Last revenue was larger than predicted 

❏ Target (TGT)67 ❏ High quality, cheap retail store ❏ 6000 customers every day ❏ Revenue of $72.6 billion ❏ Has a .81 beta, low-medium risk ❏ Div & Yield of 3.60%, sizeable return 

❏ Apple (AAPL) ❏ High quality technology store ❏ Quarterly revenue of $45.6 billion ❏ Has sold 47.8 million iPhones and 22.9 million iPads ❏ Popular company ❏ Has a .74 beta, low-medium risk ❏ Div & Yield is 2.10%, medium return 

❏ The Hershey Company (HSY) ❏ Revenue of $1.871 million ❏ Leading North American chocolate manufacturer 

❏ Quality chocolate, non-chocolate candies, and chocolate related grocery goods 

❏ Also leads in the gum and mint section 

❏ Has a .14 beta, very low risk ❏ Div & Yield of 1.90%, a little low, but we think the company is 

successful and a good investment ❏ Vanguard Wellesley Fund (VWINX) 

❏ Mutual fund, good way to diversify stock portfolio 

❏ Div & Yield of 2.97%, nice pro�t ❏ Cheap stock price ($26.02) 

❏ General Mills (GIS) ❏ Among the world’s largest food companies ❏ Sells cereal (Cheerios, Golden Grahams, etc.), Yoplait, Nature 

Valley bars, Pillsbury dough, Wanchai Ferry dumplings, Green Giant vegetables, Haagen-Daaz ice cream 

❏ Revenue of $17.91 billion ❏ Has a .24 beta, very low risk ❏ Div & Yield is 3.00%, sizeable return 

❏ Dunkin’ Donuts (DNKN) ❏ Largest co�ee retailer in America ❏ Sell 1.7 billion cups of co�ee per year ❏ Revenue is $656.77 million ❏ Has a .52 beta, low-medium risk ❏ Div & Yield is 2.10%, medium return 

❏ Wal-Mart (WMT) ❏ Large, cheap retail store ❏ More than 245 million customers per week ❏ Revenue is $473.1 billion ❏ Has a .37 beta, low risk ❏ Div & Yield is 2.50%, nice return 

❏ American Eagle Out�tters (AEO) ❏ Popular clothing store for teenagers ❏ Revenue is $3.3 billion ❏ Has a .77 beta, low-medium risk ❏ Div & Yield is 4.30%, relatively large return 

 All of the stocks listed above are long-standing, popular companies that continue to grow and prosper. They each contribute something to society that everyone seem to like, such as stylish clothing, soda, ice cream, candy, gas, technology, and almost everything in between. Each one is relatively low risk and has an average to high amount of return. We predict that they will continue on their steady growth path. 

 

Bonds and Bond Funds: Colorado Bondshares Tax-Exempt (HICOX) 

Investment grade- A+ Risk Grade- A-   

Blackrock Secured Credit Inv A (BMSAX) Investment Grade- A+ 

Risk Grade- B+ Five-Year Treasury Constant Maturity 

Investment Grade- AAA RIsk Grade- AAA 

PowerShares S&P 500 High Dividend Portfolio (SPHD) Investment Grade- A+ Risk Grade- A  

SPDR Nuveen Barclays Build America Bond (BABS) Investment Grade- A Risk Grade- B+ 

 All of the bonds we plan to invest in have high returns with very little risk. All with an investment grade of no lower than A- and a risk grade of B+ and above, we believed that these were the safest stocks that produce returns in a 5-10 year period. The interest rates keep up with the current in�ation rate of 1.5% (US In�ation Calculator) so the value of the money will not decrease over time. 

    

Real Estate:  For our real estate, we will be investing in up- and- coming Real Estate. Rental properties are our main focus as they are more a�ordable and show good signs of health in growing. Additionally, the rental rates in major cities are going up. All of this means a good amount of pro�t. We will be putting 25% into Real Estate. All of the Real Estate have attractions such as sports teams, theme parks, casinos, etc.  

Property Rental Investments:  Here is the list of the main places that buying a property rental would have good potential:   Las Vegas, Nevada Orlando, Florida  Memphis, Tennessee  Jacksonville, Florida Phoenix, Arizona      

Why These Will Be Good Investments:  Las Vegas- Vacancy Rate: 8.6%  Average Rent per Month: $803 According to realtytrac, a foreclosure company, one in every 89 houses in Las Vegas are up for foreclosure. The average house goes for $128,000, which is way less than $220,000 (the price they were selling for two years before). The intrinsic value of these homes are higher than what they are selling for, and it would be a great time to buy before a turnaround happens. The main attractions in Las Vegas are its casinos, which can bring in tenants. Las Vegas also has some top rated public high schools such as the Advanced Technologies Academy, which is 10 out of 10 star. For 

middle schools they have Sig Rogich Middle School, which is 10 out of 10 stars. Las Vegas also has several job opportunities, in �elds such as �nance, business, construction, etc.  

 Orlando- Vacancy Rate: 7.9%  Average Rent per Month: $871 Orlando, like Las Vegas, has the average price of a house selling for $120,000 which is way less than the value of the houses a year ago which was $200,000. There is also the attractions of theme parks such as Universal Studios, Wet and WIld, and Disney World. Some schools in orlando for high schoolers is Jones high school, which is rated 4 out of 5 stars. A highly rated middle school is Lake Eola middle school, which is 9 out of 10 stars. As for jobs Orlando does have a good amount of jobs in healthcare, government, and insurance.  

   Memphis- Vacancy Rate: 11.2% Average Rent per Month: $682 

Memphis, like almost all places on this list, has the average price of a house selling for $86,500. The intrinsic value of these homes are are way more than how much they are selling for now, it is a good time to buy. There are sports teams, such as the NBA Grizzlies, that can attract tenants. One of the top rated high school’s in Memphis is BT Washington High school, rated 8 out of 10 stars. Memphis also has several job openings in Management, Sales, and Customer Service. 

 Phoenix- Vacancy Rate: 8.9%  Average Rent per Month: $755 Phoenix is a growing market with houses going for $128,000 down from $198,000 last year. In Phoenix they have capital city state jobs, college town job security thanks to Arizona State University, and a military presence at Luke’s air force base. For sports team they have the Phoenix Suns NBA team. Some schools in phoenix for middle and high schoolers is the Academy of Math and science Phoenix, it is rated 5 out of 5 stars. Jobs can also be found in Phoenix, there are jobs here in human resources, customer service, and teaching.  

 

Jacksonville- 

Vacancy Rate: 10.2% Average Rent per Month: $800 The cost per house is $127,000, lower than 2 years ago average of $174,000. Unemployment rate went from 11.2%(in 2008) to 5.9% this year, the economy is stabilizing. The Jacksonville Jaguars is a professional NFL team for entertainment. One of the biggest sporting events, the Super Bowl is held here often. a middle and high school, St. John Blu� is one of the top rated schools in Jacksonville, it is rated 5 out of 5 stars. Jacksonville also o�ers some jobs as well, the openings are in insurance, car sales, and �nance.  

 

Cash  Our cash investments are in 5 year CD’s, 2 year CD’s, and MMA’s. We aim for interest rates that are higher than the current in�ation rate (which is 1.5%). We are also interested in reliable sources and paying as little extra fees as possible. These accounts are mainly for rebalancing purposes or emergency investments (such as an unusually good stock opportunity). Here are the liquid assets we use and a short description.   

❏ 5 year CD ❏ GE Capital Bank ❏ 4 star rating, reliable ❏ 2.23% return, slightly above in�ation rate 

❏ Compounded daily, higher end return ❏ 2 year CD 

❏ GE Capital Bank ❏ 4 star rating, reliable ❏ 1.19% return ❏ Compounded daily, higher end return 

❏ MMA ❏ Ally Bank ❏ 4 star rating, reliable ❏ .85% return ❏ Compounded daily, higher end return ❏ Check writing allowed, higher liquidity ❏ No opening fees, less money ❏ No monthly fees, less money 

  

Conclusion  

White Sapphire Investment Corp. is focused on helping you start your adult life and prepare a retirement fund through low to medium risk investments in stocks, bonds, cash, and real estate. We invest in successful and growing stocks, up-and-coming neighborhoods, and reliable U.S. bonds. We plan to achieve 100% return after 10 years. We hope you choose White Sapphire Investment Corp. to invest in your future.