There is no better way to gain an appreciation for investment decision making than by investing. Fortunately, there are portfolio simulation products that allow you to gain this experience without risking actual capital. During this course, you will be required to use StockTrak to complete this trading simulation.
You are given an initial account balance of $1,000,000 to invest. You need to make a minimum of 20 trades and a maximum of 300 trades during the simulation period. To limit risk, no single position account for more than 10% of your portfolio value. You should document your trades/motivation in a journal throughout the semester and be prepared to discuss your various trades in class
This activity represents 15 % of your final course grade broken down into the components:
- Following the guidelines, consistency and frequency of trades made (8 %)
- An “after action report” as the final course paper (7 %) that explains at least five transactions. For each trade, write a summary what motivated you to make the trade. You can quote an article that you read, macroeconomic trend, news, etc. The rationale of this to help you think through investing decision and evaluating how your decision has turned out.
- Late submissions will NOT be accepted. Will result in a zero grade
Trading Guidelines
- a) Perform a minimum of 20 trades, consistently over the course of the trading period. You must make at least one trade/week, starting on the second week of class
- b) Make use of each of these investments in at least one transaction so that you have done each of the following:
Category 1: Equities
— Buy/sell at least two U.S. listed stock
— Buy/sell at least two foreign stock includes ADRs
Category 2: Index funds/ETFs
— Buy/sell at least two U.S. stock index funds
— Buy/sell at least two stock index fund that tracks two different foreign markets
— Buy/sell at least two leveraged index fund
Category 3: Mutual funds
— Buy/sell at least two actively managed U.S. mutual fund
— Buy/sell at least two actively managed foreign mutual fund
INSTRUCTIONS for final report
- Save the final report as LastName_FirstName.doc
- Upload/attach the files in the Assignments folder under the StockTrak
- Must have a cover page with your name, course name and semester
- A table of contents page with section headlines and page numbers
- Report must be written in paragraphs, grammatically correct without spelling mistakes
- Each section must have a title and sub-titles (if needed). For example,
- Introduction
- Background
- Investment decision process
- Trading – explain five key trades at least one from a category
- Investment performance – the impact on the risk/performance of your portfolio
- Reflection – statement about what you learned from the experience and what you would have done differently had you taken this course before taking part in the exercise
- Conclusion
- Your final course paper should be minimum 8 pages (double-spaced)
- You must have a table containing the list of trades made (at least 20 if you have a lot of trades), date bought & sold, amount used, profit.
- You can use as many graphs or charts to explain the trades you made or the technical indicators used in making the trades. The charts and graphs do not count towards to minimum page requirement
- Give a list of the references at the end of the report. The references can be news articles, data sources used, even video links or programs that you watched. Any information that is relevant in you trading decision can be listed in the references.
