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Stock Market Simulation Introduction: The Stock Market has been a rollercoaster ride for many investors lately. However, many stock market analysts rely on the idea that losses can be made m ade up over the long run rather than in the short-term. You are going to have the opportunity to invest some “hard-earned” capital into several companies that you feel have a good chance of being profitable. Objectives: To understand the process of researching and investing in companies that offer stock publicly, through the NYSE or NASDAQ markets. To be able to make decisions, on the purchase or selling of stock, that will result in a profit being made from the initial investment •
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Directions: !
You will be “given” $100,000 to begin your investing.
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You must select THREE to FIVE companies in which to place your investment.
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You will need to complete a PREDICTIONS handout and submit it at the beginning of the simulation. A REFLECTION handout will be given at the end of the simulation. This will be turned in separately from your STOCK PORTFOLIO You will need to keep track of how well your investments are doing throughout this simulation. A “RECORD OF INVESTMENT” must be completed each time you check your stocks in class and at home. This spreadsheet may be downloaded from the class website. At one point, you will be able to reallocate some of your you r funds. This means, at that time, you may sell off stock and buy additional (or new) shares of a company. At that point, a “REALLOCATION” form must be completed. You will need to complete and submit a final “SELL-OFF” handout along with with a reflection worksheet. You will also need to submit your “RECORD OF INVESTMENT” as well as a graph showing each stock’s value throughout the the project. This graph must be a line line graph and must be created using your own data using excel or other spreadsheet program. This graph must be in color. You will need to submit a STOCK PORTFOLIO that contains the following information about your investments. These need to be in the following order: 1. 2. 3. 4. 5. 6.
Selecting a Company (WS) Initial Purchase Sheet Reallocation Sheet Sell-off Sheet Record of Investment (spreadsheet) Graph of investments’ progress (one graph for all stocks) ',#"- %*.-!, '&%/0*,&#$
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Selecting a Company (WS) !
You will need to select three to five companies that you may have an interest in investing (remember, it is better to invest in companies that you have heard about or know about their products ).
Start with what you know List 5-10 companies that your are familiar with (but not necessarily because you use their product/service) !
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List 5-10 products that you use regularly
Narrow down your choice to three to five companies
Company
Product/Service
Web Address
Ticker Symbol
1. 2. 3. 4. 5.
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Go to either Yahoo! Finance or GOOGLE Finance pages to look up the ticker symbol for the companies with whom you want to invest your money.
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Go to the Homepage of the company and look for the ANNUAL REPORT on the web page. You will need to review the report and look at the BALANCE sheet (data and graphs) for financial information that will help you decide which stock to invest in (look at the sample balance sheet...would this be a good company to invest in?). You will need to look at the company’s track record over months, or even, years, by looking at the graphics the site(s) provide. All you need to do is to type in your company’s ticker symbol.
B565789 ';99< !=5>?69 4565789:;99<9=5>?69@8A>
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Name __________________________ Period___________ Date __________
Making predictions Knowing that the purpose of investing in stock is to be able to sell the stock, in the future, for you make a profit. You need to complete this handout and submit it to the teacher separate from your portfolio. Make a prediction of how much your stock will go up by the sell-off date ____________.
1. Company ________________________________ Ticker __________ How much ($ value) do you feel your stock will increase? __________________ Explain why you feel your stock will increase by this amount.
2. Company ________________________________ Ticker __________ How much ($ value) do you feel your stock will increase? __________________ Explain why you feel your stock will increase by this amount.
3. Company ________________________________ Ticker __________ How much ($ value) do you feel your stock will increase? __________________ Explain why you feel your stock will increase by this amount.
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Making predictions (cont)
4. Company ________________________________ Ticker __________ How much ($ value) do you feel your stock will increase? __________________ Explain why you feel your stock will increase by this amount.
5. Company ________________________________ Ticker __________ How much ($ value) do you feel your stock will increase? __________________ Explain why you feel your stock will increase by this amount.
6. Which stock, do you feel will have the highest ROI? Why?
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Initial Stock Purchase Sheet ( Even though we are using technology, you will be completing handouts for the purchase, reallocation and selling of stock ). You must complete this and turn it into the teacher with your portfolio.
Complete the following information related to each investment:
1. Company Name ____________________________ Ticker _______ Purchase Price $___________ 52 Week High ______ Low_____ Number Shares purchased ______ TOTAL INVESTMENT $_______ Amount left over $_______
2. Company Name ____________________________ Ticker _______ Purchase Price $___________ 52 Week High ______ Low_____ Number Shares purchased ______ TOTAL INVESTMENT $_______ Amount left over $_______
3. Company Name ____________________________ Ticker _______ Purchase Price $___________ 52 Week High ______ Low_____ Number Shares purchased ______ TOTAL INVESTMENT $_______ Amount left over $_______
4. Company Name ____________________________ Ticker _______ Purchase Price $___________ 52 Week High ______ Low_____ Number Shares purchased ______ TOTAL INVESTMENT $_______ Amount left over $_______
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5. Company Name ____________________________ Ticker _______ Purchase Price $___________ 52 Week High ______ Low_____ Number Shares purchased ______ TOTAL INVESTMENT $_______ Amount left over $_______
How much do you have left over?________________ You can buy additional stock in one of you other companies or you can save it in a “savings account to be used at a later date.
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Stock Market Project STOCK INVESTMENT REALLOCATION
NAME ________________________________
DATE ____________
INITIAL STOCK SELL OFF
(Price/share)
x
(No. of Shares)
=
Ending Value
Stock Stock
Stock
TOTAL AMOUNT AVAILABLE
_____________
Purchasing of New/Additional Stocks
(Price/share)
x
(No. of Shares)
=
Cost
Stock Stock
Stock
Total cost of all new stock
$________________
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Final Stock Sell-Off Name
BEGINNING VALUE OF PORTFILIO
(Price/share)
x
$
(No. of Shares)
=
100,000
Final Value
Stock Stock
Stock
Stock
Stock
Total cost of all stock
$________________
Savings
$________________
Current value of stock portfolio $________________
Difference between initial value and current value totals (+/-)
Capital Gain
or
$________________
Capital Loss
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Name _________________________ Per. _________ Date_____________
Stock Investment Reflection Review your predictions from the beginning of the project. Reflect on the outcome of your investment and answer the following questions in a legible manner (may be typed). This is to be submitted separately from your portfolio. 1. Did any or all your predictions prove to be true? Explain how that (possibly) happened for each stock you purchased. a. _______________________________________________________________ _______________________________________________________________ b. _______________________________________________________________ _______________________________________________________________ c. _______________________________________________________________ _______________________________________________________________ d. _______________________________________________________________ _______________________________________________________________ e. _______________________________________________________________ _______________________________________________________________
2. Describe some of the factors that influenced the value of your stock. _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________
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3. Describe some of the challenges you had throughout this simulation regarding decision making and being prepared. _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 4. Would you ever consider investing in stocks in the future? Explain your answer in a minimum of four sentences. _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________
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