Forgot Password?

Personal Finance & Investing – A StockTrak Project

    STOCK-TRAK Simulation

Preliminary Report

STEPS:  1. Complete a four-page description of your investment plans using the topics below as an outline (20 + 5 points)

  1. Summarize your Strategy, filling in the blocks on this page (5 points; 3 + 2 for forecasts)
  2. Staple #2 on #1 and turn in complete report & $2.00/teammate

Due Date:   September 23 (1 point deduction per class period after 9/23)

Team Membersa: ________________________________________________________________

Selection Criteria

Summary of Selection Criteria within Investment Policy (3 points)

[Summary ~ Less than fifteen words]

High Return/Risk v.

Low Risk/Return

 

Active trading v. Buy-and holding

 

Stock v. Bond (v. Options/Futures)

 

Economic/political sensitivities

 

Special industries v.

Broad diversification

 

Selection criteria within industry

 

Timing & Margin

-Market v. Limit order

Cash v. Margin account

 

Current income v.

Capital appreciation

 

Direct v. Indirect Investment  
Other considerations  

During the simulation, what do you expect to be the rate of return on (1/2 point each):

Common stocks (i.e., S&P 500)?  __________

Treasury bonds (sum of coupon payments & price change)? __________

Include at least 5 citations from the Internet, Wall Street Journal, Fortune, etc.  (+5) ß

a Groups of two students are acceptable.  Team members share the effort tied to data gathering, decision making and simulation cost that exceeds coordination effort.  Larger groups often result in a “free-rider” phenomenon.

 

Grade Sheet

STOCK-TRAK Initial Strategy Report

                                                                                                       

 

Grading Dimension Possible Points Your Score
Cover Sheet Summary 3  
Forecast for common stocks and Treasury bonds 2  

Detailed Analysis of:

High Return/Risk v. Low Risk/Return

2

 
    Active trading v. Buy-and holding 2  
    Stock v. Bond (v. Options/Futures) 2  
    Economic/political sensitivities 2  
    Special industries v. Broad diversification 2  
    Selection criteria within industry 2  

    Timing & Margin

-Market v. Limit / Cash v. Margin account

2

 
    Current income v. Capital appreciation 2  
    Direct v. Indirect Investment 2  
    Other Considerations 2  
Citation Use – Minimum of 5 5  
Total Score 30  

Team Members: ___________________________________

Due 10/21

Mid-Semester Report

Fundamental Analysis & Technical Analysis

  1. List the two most important criteria in your selection process and note whether they are fundamental or technical (price & volume related) factors. (4 points)

Primary Factor: ______________________________   Technical or Fundamental? _______________

Second Factor: _______________________________   Technical or Fundamental? _______________

  1. Identify your three largest investments (long or short sales), in dollar terms, to date and justify their selection on the basis of your criteria. (3 points)
Choice Selection Criteria
a.  
b.  
c.  
  1. For these three largest investments calculate the holding period returns for each in dollars and percentage terms. (4.5 points)

Investment

Holding Period Return in Dollars

Holding Period Return in % terms

a.

 

 

 

b.

 

   

c.

 

   

Using the Wall Street Journal’s “Markets Diary”, Markets Lineup”, “Markets by the Slice,” or “International Stock Market Indexes,” or prime competitor note, whether the three investments beat the return on a relevant benchmark. (4.5 points)

Comparative

Investment/benchmark

Benchmark’s Holding Period Return in % terms

Did you do better or worse

than Benchmark?

a.

 

 

 

b.

 

   

c.

 

   
  1. On a separate, typed sheet, list and discuss the major event(s) or condition(s) (company, industry, macroeconomic factors) that resulted in better or worse performance for each of your three largest investments. (6 points)
  1. E. On the line’s below, list at least one mutual fund, option and futures contract that you think would be a good investment and explain your selection. (3 points)

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

                                   FINAL STOCK-TRAK SIMULATION REPORT

TEAM: _________________________________________________________

 

 

Grading Dimension

 

Possible Score

 

Your Score

Opening Strategy

– Specify and support strategy

– Relate to original selection

2

 

Portfolio Revision

– Specify and support changes

 

2

 

  NOTES to Opening Strategy and Portfolio Revision:

If you did not revise strategy, support decision to maintain original selection

Answer the following questions:

–  Why were certain securities chosen, but not others?

–  Why were certain firms in an industry chosen, but not others?

–  What rate of return were you anticipating?

Performance Evaluation

  a. Largest Stock Investment,

à If largest stock is “b” or “c”, add 2nd largest stock

  b. Investment with greatest gain,

  c. Investment with greatest loss, and

  d. Entire portfolio

 Include:

   i.  Holding period returns ($, %)

& Evaluation of timing ability

(Buy near simulation period’s low or high?)

ii. Market-excess returns

(Benchmark return over same holding period)

& Comparison to other investments

(Alternative shares, bonds, futures)

iii. Risk-adjusted returns

(Stock – Treynor/Jensen,

Bond/Future/Option/Portfolio: Sharpe)

12

 

Proposed future investment strategy

  – Choices for the next six months

– Choices for a 5-year investment horizon

Note 1: Identify specific investments

Note 2: Justify forecasting firm/industry/economy

2

 

Report presentation

– Grammar, Spelling, Clarity (subheadings)

– Citations

Bonus Points: Effective use of Illustrations

2

 

 

20

 

       

Length: 4-6 typed pages

Comments are closed.