Case Russ Alonzo Takes Stock of His Securities Russ Alonzo is 42 years old, single, and works as a designer for a major architectural firm. He is well paid and has built up a sizable portfolio of...

Case

Russ Alonzo Takes Stock of His Securities

Russ Alonzo is 42 years old, single, and works as a designer for a major architectural firm. He is well paid and has built up a sizable portfolio of investments. He considers himself an aggressive investor and, because he has no dependents to worry about, likes to invest in high-risk/high-return securities. His records show the following information.

1. In 2006, Russ bought 200 shares of eBay (NASDAQ; symbol EBAY) at29.77 a share.

2. In 2013 he bought 250 shares of Facebook (NASDAQ; symbol FB) at
26.89 a share.

3. In 2008, Russ bought 200 shares of United Technologies Corp. (NYSE; symbol UTX) at
74.92 a share.

4. In early 2009, he bought 450 shares of JPMorgan Chase (NYSE; symbol JPM) at
16 a share.

5. Also in 2009, Russ bought 400 shares of PepsiCo (NYSE; symbol PEP) at
52.50 a share.

6. He has
12,000 in a 1 percent money market mutual fund.

Every three months or so, Russ prepares a complete, up-to-date report on his investment holdings.

Critical Thinking Questions

1. Use a form like Worksheet 11.2 to prepare a complete inventory of Russ’ investment holdings. (Note: Look in the latest issue of The Wall Street Journal, or pull up an online source such as http:// finance.yahoo.com, to find the most recent closing price of the five stocks in Russ’ portfolio.)

2. What is your overall assessment of Russ’ investment portfolio? Does it appear that his personal net worth is improving because of his investments?

3. Based on the worksheet you prepared in Question 1, do you see any securities that you think Russ should consider selling? What other investment advice might you give Russ?