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Name:_____________________________ Date:__________Class Period:_______Stock Market Investment ProjectPurpose: The purpose of this project is to teach students basic elements of stock market investing, including:Reading company financesComparing and contrasting different companiesDeciding what stocks to buyResearching financial newsEvaluating stock purchases and deciding when to buy and sell stockGoal: After doing this project, students will be able to use fundamental understanding of how the stock market works to confidently evaluate whether to make investment in company stock a part of their personal saving and investment strategy.Rules:We will be investing through the website market You have $100,000 to invest in stock. The game has certain limitations on what you can and can’t buy, but you are free to buy in whatever way you please so long as the simulator allows you to invest.Each buy and sell transaction comes with a fee of $7.00, so be wise in choosing what you want so you don’t waste money on transaction fees.You can buy on margin, but this is like taking out a loan, and the interest gained on the margin you have to pay back)You can buy and sell as much as you want, but remember that each transaction has a fee!Due Date for Project: January 8, 2016The rubric is on page 12 of this project packet.Part 1 Stock BasicsDirections: Read these tutorials linked on mrB. under “Stock Market Project”. The titles of the tutorials are bolded in black.Investing BasicsWhat are stocks? sectionWhat are stocks?What does ownership in stocks entitle a person to?What is the difference between financing through debt vs. equity?What causes stock prices to change? sectionWhy do stock prices change?What is market capitalization?How to read a stock ticker/quote sectionWhat do each of the following stand for?52W High / 52W LowTickerDivYield %P / EVol 00sHighLowChangeNet chgThe Bulls, the Bears, and the FarmWhat are the bulls?What are the bears?Short Selling:Explain “short selling”. Give an example of how you would make money from short selling.What is the risk of short selling? Part 2: Considering what to buyWhat are 10 of your favorite products, brands, or companies? List them in the chart below. (Ask Mr. B if you need help with this.)CompanyTicker SymbolCompanyTicker Symbol16273849510Why do you like these companies more than other companies?Choose one of the stocks that you like. Go to . Type the ticker symbol in the search box at the top of the page and click the search button (Example: Apple is AAPL). Fidelity should take you to the research page for your stock. Change the Time Frame underneath the chart to 1 year if it is not already there. Draw the chart below. OR draw on your own piece of paper and give to Mr. B with your name. Include:Symbol of the stockTime length on horizontal axis (1 year or listed months)Stock prices on vertical axisPicture of the price graph from Fidelity.(See Mr. B if you have any questions)Stock PriceTimeStay on the Fidelity page. Click Compare(This is located on the list of links on the left side). Before you get overwhelmed by the chart, here are what a few of the most important terms you see mean:Price Performance: The percentage growth of the stock in the last 52 weeks.Market Capitalization: This is how much has been invested in the stock market (Price x Amount of total shares = Market Capitalization)% of Institutional Ownership: The percentage of the company that is owned by outside investors.Dividend Yield: The percentage of an investors’ investment that the investor earn in a year in cash.EPS = Earnings per share. This is how much money the company has earned per share of stock.TTM= Trailing Twelve months. (This means “in the last 12 months.”)What do you think the number for Total Revenue represents?What numbers will you look at the most when deciding whether to invest in a company?Stay on the Fidelity Compare page for your stock. Click Show Competitors to compare your stock to 4 similar companies. Choose one other company on that list. What company is it?How are the two companies related?Before looking at the chart, which of the companies do you think has a higher Total Revenue?After answering c., look at the comparison between the two companies. Which company has a higher Total Revenue? Were you correct in c.?How might comparing financial statements and company performance help you make investment decisions? Which of your companies (from the initial 10) would you invest in? Why?Part 3: Time to Invest!Make your investment decisions. On market watch, buy the stocks that you want to be in your portfolio. What stocks did you choose to buy initially? List stocks with price, amount of stocks, transaction cost, and total price below. The stocks you own are called your Portfolio.DateStockPriceAmount boughtTransaction cost (typically $9.99)Buy = TOTAL COST (-number)8/15/13Example: Apple (AAPL)$498.22Bought 200 shares$9.99-$99,653.99Why did you choose the stocks that are in your portfolio?Part 4: Market ResearchRead three news articles from the last 3 months about a few of the companies you have invested in. (You may use one of these articles for your article project as well if it is from a reputable news source, but make sure you do the write-up for that project separately. Start with if you need a starting point).Article #1Name of Company:Source & Date of News: Headline:Is that story important? Why or why not?Article #2Name of Company:Source & Date of News: Headline:Is that story important? Why or why not?Article #3Name of Company:Source & Date of News: Headline:Is that story important? Why or why not?Follow-up questions (from articles you read):What is the most important thing you learned about one of the companies in your Portfolio?Did you decide to make any changes to your portfolio after reading these articles? If so, why and what decisions did you make. If not, why not?How can reading news stories help you make smart investment decisions.Portfolio Changes.List the Portfolio changes you have made since question #7. Note: Cost Basis is the amount you paid initially for the stock. FILL THIS OUT AT LEAST When you sell the stock, you subtract the cost basis from the sale price to find out how much you gain or lose. See example below:DateStockPriceAmount bought/soldTransaction cost (typically $9.99)Buy = TOTAL COST (- number)Sell = TOTAL CASH FROM SALE (+number)Cost Basis (Initial Cost)Sell =Gain (+#) or Loss (-#)8/15/13Example: Apple (AAPL)$498.22Bought 200 shares-$9.99-$99,653.99-$99,653.999/15/13Example: Microsoft (MSFT)$31.15Sold 2000 shares-$9.99+$62,290.01$70,429.99 (Initially bought 2000 shares @ $35.21, with $9.99 transaction fee)-8139.98Why did you buy or sell the stocks listed above?Part 5: Portfolio AssessmentGo to your Portfolio on Market Watch. Fill in the chart below in the following way:First Column = List the names of all the companies for which you have stock in your portfolio.Second Column = Write the Stock Symbol.Third Column = Write how much you have gained or lost on each stock on the day you complete this assignment.Fourth Column = Comment. Answer some of the following questions: Why did you first buy each company? Did you ever change your mind about each investment? Why? How do you feel about it now?Fifth Column = Give yourself a grade on each investment based on this scale:A = I am a genius for picking this stock.B = I am not sure about this stock, but I will wait and see.C = What in the world was I thinking? That was NOT a good pany NameStock SymbolGain/LossCommentGrade(Questions on the next page)Questions:Discuss?two companies (or industries)?that either?rose?or fell a lot.? Explain why this happened as best as you can (use the news feed for companies to help).ALSO, did any of your companies remain pretty stable during the time period??What are some of the reasons why some of your companies were volatile, while others were stable? An answer of “no” is not sufficient.Describe an example of when you really think you succeeded in the?market (i.e. buying a stock low and then selling it high; or keeping?it longer and it stayed high).? OR?describe an example of when your "great" idea?on a stock turned out to be not so great.??Based on your portfolio, what companies have surprised you with gains or losses? How?What lessons about the stock market did you learn during the stock market project?If you were to repeat this again or get involved in the real stock market,?how might you apply those lessons?In your learning about financial markets, it is stated that diversification helps to reduce risk and provides the best chance for success. How did you (or did you not) employ diversification in your portfolio?The stock market can fluctuate for reasons outside of the control of the companies in which you invested. In what ways have you seen outside events affect the stock market? (hint: think about credit ratings and international tension)What grade do you give yourself for your entire portfolio OVERALL? Why?Part 6: ReflectionReflection Question. Based on what you know and have learned through the Stock Market Simulation, write a 2 page essay (typed, double space, Times New Roman or Calibri) answering the following questions:Question: In the future, when investing, will you rely on the opinions of experts (through news articles, finance blogs, website analysis, etc.) when making investment decisions, or will you make personal investing decisions based upon your own research and knowledge about a company.”Format: The format of the essay is your own choice, but make sure it includes: (1) pros and cons of following experts to make financial decisions, (2) pros and cons of doing your own research to make financial decisions, and (3) the one you will choose to rely on primarily in the future, and why.X5X4X3X1Part 1 (4)Accurately Completed all questions for Part 1Accurately Completed 75% of questions OR turned in fully completed questions lateAccurately Completed 50% of questions OR turned in partially completed questions lateCompletion of one or two questions___/20Part 2 (3)Accurately Completed all questions for Part 2Accurately Completed 75% of questions OR turned in fully completed questions lateAccurately Completed 50% of questions OR turned in partially completed questions lateCompletion of one or two questions___/15Part 3 (2)Bought stocks and completed all questions on timeBought Stocks on time but did not complete the other questions, OR turned in fully completed assignment late.Turned in partially completed questions late. STOCKS MUST BE BOUGHT.Did not buy stocks___/10Part 4 (3)Completed all of the article readings, answered all questions related to the readings, and finished all other pleted all article readings and questions, but did not finish other questions, OR turned in the fully finished assignment lateCompleted 50% of questions, including at least 2 Articles, OR turned in partially completed questions lateCompleted one or fewer articles, even if they finished other questions___/15Part 5 (3)Accurately Completed chart and all questions Accurately Completed chart but not questions, OR turned in fully completed assignment lateFinished questions but not chart, OR turned in partially completed assignment lateOnly answered 1-2 questions ___/15Part 6 (5)Reflection Essay clearly answers the three points listed on pg.12, AND the other questions are answered. Also, the essay is 2 pages, typed, in Calibri or Times New Roman fontReflection Essay clearly answers the three points listed on pg. 10, but other questions are not answer, OR fully completed assignment is turned in late OR Essay is complete but does not meet formatting requirements.Reflection is missing at least one of the three points listed on pg. 10, OR partially completed assignment is turned in late. OR Essay is partially complete but does not meet formatting requirements.Reflection is missing, but the other questions are answered.___/25 Total out of_________/100Rubric for Investment ProjectIF YOU HAVE ANY QUESTIONS, ASK OR EMAIL MR. B ................
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