Download Stock Market Game Outline and Grading Rubric

Stock Market Game Outline and Grading Rubric
We will be playing a stock market game for approximately 4 weeks. Below are the rules
of the game, which you should read carefully. Failure to meet all the requirements of the
game will negatively impact your grade on the project.
Objectives of the Stock Market Game:
The student will:
1.
Learn the importance of beginning to invest at an early age, and
continuing throughout their work career.
2.
Learn the importance of equity investing as a preferred method of building
personal wealth.
3.
Understand various strategies for investing.
4.
Understand the tools available for evaluating stocks as potential
investments.
5.
Be able to use the Internet to access information about investing.
In class during the first couple days of the game, we will be learning how to read a stock
page, the meaning of various tools that are used to analyze stock, and various strategies
for investing.
Procedure:
1.
You will be given a hypothetical $100,000 to invest in stocks listed on either
the NYSE or NASDAQ stock exchanges.
2.
You must invest in at least five companies.
3.
You must research at least one of the five companies, providing at least the
following information about the company:
a. A company profile, i.e. history and what they produce. (minimum 2
paragraphs)
b. Relevant financial information, such as total sales, total profits, dividends,
P/E ratio, number of outstanding shares, recent stock performance
c. Why you selected this company as a “buy”
4.
You will be required to make at least two trades during the course of the
game. These trades may be either a simple sale of one stock and the purchase
of another in the same value, or a partial sale of one to acquire a new holding
or more of an existing holding. At all times, you must own at least FIVE
stocks to simulate a “diversified” portfolio as most investment counselors and
brokers recommend.
5.
You will set up an online portfolio for tracking your holdings, according to
directions that will be made available to you.
6.
You will track your stocks weekly, recording the results on a transaction
register that will be provided.
(Note: We will NOT be investing in mutual funds, preferred stocks, bonds, bond funds,
or any of a number of other possible investment vehicles. For the sake of simplicity and
uniformity, we will only invest in common stocks on the two exchanges listed above.)
Grading Rubric:
Your grade on the project will consist of the following items, each weighted equally.
1.
2.
3.
4.
Research on one of your five original stocks, turned in on time.
Successfully setting up your online portfolio.
Completing each of the assigned updates of your portfolio in class by bringing
a printout of your portfolio.
Completing at least four trades during the course of the game.
Please note that your grade will NOT be based on how your “investments” perform, i.e.,
whether or not you make money. Four weeks is an extremely brief time in the life of the
stock market; the purpose of the game is to develop an understanding of how the market
operates, and how investing is accomplished. However, extra credit will be awarded to
the top 4 earners in each class, provided they have met all of the above criteria.
Steps to Create a Stock Portfolio for Online Tracking
These directions are for Yahoo, but most others work similarly. Feel free to use another
similar service. BEFORE you begin to create your portfolio, BE SURE to have
completed the following steps:
a.
selected all of your stocks
b.
looked up and written down the stock symbol
c.
looked up the current price
d.
done your math to decide how many shares of each you wish to purchase
Record this information and have it ready.
1. Go to the Yahoo homepage at Yahoo.com. Just below the search box, among many
options, will be a heading labeled “Finance.” Click on this.
2. This will take you to a screen labeled “Yahoo Finance.” On the “Welcome” line will
be an option to “Sign Up.” Click on this. (If you already have a Yahoo e-mail
account, you don’t need to do these registration steps: just sign in to your account.)
(NOTE: After you first register, you will click on “Sign In” when you want to check
your portfolio.)
3. You will then go to a screen that asks you to enter an ID and a password. Enter both
items and make a record of them for future reference. (I would suggest that you use
your full name and the last six digits of your SS number—simple is better!) Yahoo
will also ask you for an alternate e-mail address. If you don’t wish to enter a real email address, make on up, but be sure to fill it in.
4. After you fill in the required fields correctly, go to the bottom of the screen and click
on “Submit This Form.” Yahoo will then verify your form, display your ID and email address, followed by a line labeled “Continue to Yahoo Finance.” Click on this.
5. On the next page, find the Portfolio section, click on “New Portfolio.”
6. Click on “Track Your Current Holdings.” You will be asked to name your portfolio—
USE A SIMPLE NAME THAT YOU WILL RECOGNIZE!
7. You will have to name the portfolio and you must remember that you will be entering
the stock symbol rather than the company name, so you will have to find this symbol
for each of your companies before you can continue. BE SURE UNDER BOX #3,
LABELED “BASIC FEATURES” TO CHANGE THE VIEW FROM “BASIC” TO
“PERFORMANCE” SO THAT YOU WILL SEE TOTALS FOR YOUR ENTIRE
PORTFOLIO’S PERFORMANCE EACH TIME YOU OPEN IT.
8. Edit the portfolio view to show the information that you need, including shares owned
and purchase price per share. This is under “Advanced Features.” Then, click on
“Continue.”
9. On the next screen, labeled “Portfolio Details for: (Your ID)” fill out the number of
shares and the price per share, click on “Finished.”
10. Now that your portfolio is set up, each time you enter Yahoo, use the following steps:
a.
b.
c.
d.
e.
click on Finance
click on Sign In
enter ID and password
click on Sign In
under Portfolio, click on your portfolio name
Trading Stocks
In order to trade, you must first complete the following steps:
a. decide how much money you wish to invest in a “new” stock
b. get an updated price for both the stock that you are selling and stock you are
buying
c. calculate the number of shares of the stock that you are selling that you must
sell in order to receive the amount of money that you need for the new
purchase.
d. calculate the number of shares of the stock you are buying that you can buy,
based on the dollars you will get from selling the “old” stock
e. be sure to have the stock symbol for the “new” stock(s) to enter into the
computer
From this point on, if you want to change your portfolio to reflect trades, go into Finance
as above and enter your ID and password. Then, on the “Portfolio” line, click on
“Manage” then “Edit.” This will take you back to the box where you originally entered
the stock symbols for your stocks. Follow these steps:
a. delete any stock symbols for stocks that you are completely selling
b. add stock symbols for new stocks that you are buying
c. add share amounts and per share prices for stocks you are buying
d. if you are making a partial sale, be sure to edit the number of shares for the
stock that you are partially selling
Step 1 – Find Correct Stock Symbols
Go to www.yahoo.com
Click on “Finance”
Select “Symbol Lookup”
Enter the name of your company, then select the correct symbol and click on it.
Remember, you are only allowed to buy stocks in the New York Stock Exchange
(NYSE) or NASDAQ. Check this under the “market” column.
Find and record the “Last Trade” price.
Repeat this procedure for each of your four stocks.
Step 2 – Allocate Your Money
Decide how much of your $100,000 will go to each of the five stocks; this may be split
up any way that you choose.
Divide the amount of money that you intend to invest in each stock by the “Last Trade”
price that you have found for each stock. Important note: Round the number of shares
for each stock DOWN to the nearest tenth of a share! This guarantees that you will not
overinvest. You may NOT exceed $100,000!!
Record all of your information and be sure not to lose it; if something happens to your
portfolio at any time during the semester, we can easily recreate it so long as you have
this information.
With any remaining time, go ahead with the research that you are supposed to do on one
of your four companies. See “The Stock Market Game” for exact information about what
the research should contain. Much of this information may be found at Yahoo.com, and
you might also look on the corporate website of the company you are researching.
Name:
Company
Date:
Stock Symbol
Total Amount I
Want to Invest in
this Company
Current Stock
Price
# of Shares I am
Buying (rounded
down to the
nearest tenth)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
***Note***
You must buy stock in AT LEAST five companies. I included #6-10 in case you wanted to further
diversify your portfolio, though you don’t have to if you don’t want to. Again, you may buy stocks
in as many companies as you want, but you must buy shares in at least five.