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In responding to these two posts, remark on aspects they discussed that the original post perhaps did not consider.

I also post the questions and first post, second post and original post as the references in the word document. Each comments should be around 50-100 words. Thanks.

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Questions: • When looking to invest corporate dollars, do you think the top-down approach is preferred over the bottom-up approach? Why or why not? Use resources and your chapter readings to support your reasoning. • In what way(s) might you consider implementing the bottom-up strategy for the portfolio in your final project? • How can you justify applying the top-down approach in your final project portfolio? The first post: When looking to invest corporate dollars, do you think the top-down approach is preferred over the bottom-up approach? Why or why not? Use resources and your chapter readings to support your reasoning. The top down investing approach is the opposite of the bottom up investing approach. The top down approach is one of the commonly used approaches when investing in asset portfolio. The approach involves looking at the bigger picture first when making stock investment. It focuses on analyzing the elements that may impact on the stock prices including the economy as a whole, the country, and other factors that may directly affect the prices of individual stocks (Bender & Wang, 2016). It is imperative to understand that there a myriad of factors that influences the prices of individual stocks. These factors may include the level of inflation, the market interest rates, the fluctuations in the value of the country’s currency, and many other factors. The top down stock investment approach takes into account the impacts of these factors on the price of the individual stock within the portfolio (Bender & Wang, 2016). When making investment in corporate dollars, it is important to utilize the top down investment approach. This is because the corporate dollars are sensitive to changes in various factors in the economy such as inflation and interests rates. Utilizing the top-down investment approach will allow the investors to evaluate the impact of these factors on the corporate dollars within the market (Bender & Wang, 2016). The top down approach will focus on looking at the bigger picture of the economy as a whole and its impact on the price of corporate dollars within the money market. The top down approach will also facilitate the impact of factors such as GDP, inflation, currency value movement, and inflation on the price of corporate dollars. In what way(s) might you consider implementing the bottom-up strategy for the portfolio in your final project? The bottom up investing approach places emphasis on individual stocks and companies rather than the industry or the economy. In this case, I will consider implementing the approach in my portfolio stock investment to analyze each stock based on the performance of the individual company. This approach is the most ideal in the case of stock portfolio investment since it will enhance evaluation of the individual stock based on the performance of the company in the market (Bender & Wang, 2016). Even though the industry may be underperforming, the bottom-up approach would still assume that the individual company is not the industry and may still perform better than the industry. How can you justify applying the top-down approach in your final project portfolio? In my final project portfolio, it can be justified to apply the top-down approach in the sense that it will help determine the impact of various economic growth indicators on the individual stock. In other words, the top-down approach focuses on the economy as a whole and the impact of various economic factors on the individual stock (Chambers, Dimson & Foo, 2015). By utilizing the top-down approach, it will be easier to forecast the performance each individual stock in the market based on the performance of the economy. The second post: Both top-down and bottom-up methods are used to analyze investments in stocks. In a top-down approach “alpha computed from running a time series regression using mutual fund returns” and gives you an overall evaluation and concentrates more on the big picture. Top-down also focuses on the performance of each sector and analysis GDP, interest rates and inflation. By analyzing the economy, macroeconomic factors and each specific sector, investors can have an idea of how the industry is functioning and can find the best opportunity. Bottom-up approach focuses on each company and analyzes the individual company stock, price-earning ratio. There is less emphasis on market condition and macroeconomic factors. The bottom-up approach analysis each specific company and investors can identify the best opportunity. “The bottom-up approach assumes that individual companies can do well even in an industry that is not performing very well. This is the opposite of another approach, called top-down investing.” (Pavia, J. 2015). The top-down approach is preferred over the bottom-up approach since it compares each company within their own industry and competitions. Comparing to the bottom-down method, the top-down approach is less focused and will cost less. A top-down approach is suggested in order to have a clear image of the company’s financial health when investing in a stock. Original Post Investing in foreign currency like the dollar is considered to some as a risky business. A while back the Forex market was hugely dominated by the banking industries but as time went by the online booking increased and many institutional investors were competing with online commercial trading from individuals and corporations. This move has made Forex trading more accessible and beneficial to everyone who uses it. To invest wisely in any form of currency is determined by the knowledge on foreign exchange (Lee, Khan, Ha, & Jae, 2018). Every investor experience risk once in a while and benefits after spending in foreign currency is the most abundant liquid market. The high leverage used while spending in dollars can result in high volatility and a higher risk of loss. Being mindful of the many dangers apart from the traditional equity and bond markets, one should consider risk management techniques to benefit from the corporate dollars. The strategies, top-down and bottom-up help in the information processing and the ordering of knowledge which uses software or scientific theories. The top-down approach helps investor have a breakdown of the system and have insights into the sub-systems before trading. This approach projects the big vision of investing in dollars and breaks down into segments what deeply entailed. According to (Lee & Zhong, 2014), the top-down approach in investing involves the macro picture of the economy and factors in details. Investors who use the top-down approach allocate investments from diversified assets allocations rather than companies. The corporate dollar in the Forex trading increases its value in this portfolio by addressing the top-down approach in most of their market evaluations. This approach produces more strategic collections including passive indexed strategies. The bottom-up approach is based on the data from the environment to form a perception. They lead to tactical and actively managed strategies (Levit, 2005). The main focus is on analyzing individual stocks and companies rather than the economy. Even if there are issues of underperformance, the bottom –up will view it as a wise investment of the company or individual. Investors using bottom-up approach ignore macroeconomic factors that affect a company. To support that top-down is better than bottom-up approach because it is useful to determine the most promising aspects and sectors in a given market. The implementation of the bottom-up approach to investing reduces the tasks of initial planning to implement more capabilities to realize quick returns of your investment for a broader base of users and managed resources achieved. While considering to apply the identify foundation capacity you have to plan strategically in this approach. After meeting the objectives for implementing the password management capability, an investor has to create a plan to impellent other skills needed to achieve the targets. Large companies or independent investor who wants to realize costs saving are advised to use this approach. Justifying the top-down approach, which describes the traditional organizational style that emphasizes the imperatives of management? Another justification of this approach is that it unifies the firm's purpose, direction, and standards. For investors, it helps in strategic planning before investing in any form of currency, in particular, the dollar hence good budget plan. Diversification in foreign countries is proof that top-up approach is suitable in spending corporate dollars resulting in a diversified portfolio. If an investor feels risks of selecting and buying an individual stock, the top-up approach is intensive in analyzing individual stocks from some perspectives.
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Generally, the analyses of stock investment can be done using the top-down and
the bottom-up approaches. The top-down approach gives overall evaluation and
focuses on the entire economy. In addition, it mainly...


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