Participate in a trading simulation exercise using the Investopedia Simulator Stock Market Game. Go to http://simulator.investopedia.com and (i) register and (ii) join the game. The name of the game: UNB Summer 2014. The password for the game is investments.
There is a guide at http://www.investopedia.com/university/Simulator/default.asp (you need to scroll a bit to find it).
The game is open on Thursday May 6, 2014. The last trading day for purposes of writing the report will be Thursday June 17, 2014 but the game will be open until August 31, 2014.
You are to submit a report of your trading activities on Th. June 19 by 4pm. This report will show your trading activity and the value of your portfolio by the last trading day. The report must contain, at least, the following parts:
i) Brief overview information about one of the companies that you traded in. State one thing you learnt about this company that might (or might not) make it a good company to invest in for the long term.
ii) An important economic and/or market developments (or events) of interest to you (as an investor) during the trading period; it could be events that started prior to the trading period. State clearly why you consider it to be important and relevant for investors.
iii) Graphs showing the day-to-day returns (volatility) and cumulative returns of your portfolio relative to the S&P 500 and another index of your choice. It is a good idea to show a table (or tables) of data from which your graphs are drawn.
iv) Ex post (after the course) investment strategy; i.e. what you would do differently based on what you have learned during the course and if you were using your own money. State some of the relevant important lessons you learnt about investment during the course or from the trading simulation.
Although part of your interest is to get the highest return, grades will be based mainly on the thought you put into writing the report and how well you present your results.
Your grade will be determined primarily by the quality of the overall report that reflects a good understanding of investments and how much you have paid attention to stock market and economic activities during the trading simulation period.
Item (iv) in your report is very important and it will carry substantial weight in the grading scheme. Since the analytical basis for most of the investment strategies will be learned during the course,
it is important for your report to include what you would do differently if this exercise was repeated with you acting as a serious investor rather than just a trader. It is in this part of the report that you will have to demonstrate the incremental knowledge that you gained from the course and how you plan to apply that knowledge. Don’t forget to cite references.
VERY IMPORTANT: In order to draw your graphs you need to keep record of the value of your portfolio everyday.