Stock Project for Investment Class

Assignments:

1) Develop an objective statement: See page 495-6 of text to get an idea about formulating your objectives.

Objective/Philosophy Statement-This should be in the form of a one-page specification sheet. It should describe the goals of the portfolio, the investment style, benchmark index for performance assessment, and asset allocation. Please note that in the subsequent development of your portfolio, attention should be paid to meeting your objective and achieving adequate diversification. Your grade will be partially determined by how well your portfolio "fits" your objective.

2) Enter the "game" on Virtual Stock Exchange (VSE) using the instructions provided. Practice trading for the next 2 weeks to familiarize yourself with the system. I encourage you to use this period to fully understand the game mechanics and to get a feel for the market as it is now.

We will use the Virtual Stock Exchange provided by MarketWatch for the stock project. A link to the trading rules for VSE can be found at the site below, as well as links to FAQs.

The portfolio charges a fee of $10 per trade. You earn interest at the rate of 1% on un-invested funds, and are charged 6% interest on loans.

Use the information and directions below to join the game:

Game Name: SWOSU Invest Class 2016 Game Password:shelby

Game Tag line: Tee it Up

1. Open this link and read the competition summary: www.marketwatch.com/game/

2. Click on the 'Join Game' link.

3. If you are an existing Virtual Stock Exchange member, enter your Email address and Password in the login panel and get set to trade. If you are a new user, follow the link to register.

It will be required that you log and explain every trade you make in the portfolio. Once you have entered the ‘game', focus on developing your long-term investment strategy before trying to make money in the short term. Remember to allocate your long-term portfolio's assets based upon your willingness to accept risk, and that you need to be adequately diversified.

3) Portfolio Management Constraints

• Each position you take in an asset must be a minimum of 10% of your assets and a maximum of 20% of your assets.
• Cash must not exceed 50% of your portfolio at any time. We want you invested, not sitting on the sidelines.

4) Final Virtual Stock Exchange Debrief Paper

A two to three-page, double-spaced paper about your Virtual Stock Exchange experience will be due at the end of the semester. Please address the following:

• Which positions exceeded your expectations? What conditions caused this?
• Which positions underperformed for you? What factors created the performance gap?
• What are the key things you learned from your Virtual Stock Exchange experience?
• How will your Virtual Stock Exchange experience influence your personal investing in the future?