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The Stock Market Game Program

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The Stock Market Game Program. Introduction of financial markets ... Look for newly published news articles. Track the price of the stock in your portfolio ... – PowerPoint PPT presentation

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Title: The Stock Market Game Program


1
The Stock Market Game Program
2
The Stock Market Game Helps Students Learn
Introduction of financial markets and institu
tions How to choose and buy stocks How sup
ply and demand operate in real markets
Connection between current events and the
economy The role of Wisconsin and the US in th
e world economy Key economic events of history
Personal finance and budgeting skills Valu
e of investing for the future
3
NAEP Findings
  • The National Assessment for Educational Progress
    was established by Congress in 1969 to provide
    objective information on student achievement in a
    variety of subject areas.
  • Recently NAEP tested twelfth graders economic
    literacy for the first time.
  • Students participating in The Stock Market Game
    for class scored an average scale score of 159,
    nine points above the national average of 150.

4
How does it work?
Students work as teams to invest a hypothetical
100,000 in stocks, bonds, and/or mutual
funds Simulation portfolio mirrors on-line tradi
ng accounts All trades are placed on the
SMG website Students can trade from any computer
with internet access - even after the
market closes
5
How much time does it take? Flexible program
You choose The amount of time you spend Some
use it every day, others once a week
Choose from a 10 week, 15 week, or seven month
game Learning doesnt stop when the trading s
tops
6
Competitions
  • School Age Competition
  • Elem. School - Grades 4-5
  • Middle School - Grades 6-8
  • High School - Grades 9-12
  • Other Competitions
  • Post-Secondary
  • Adult
  • DOC

7
Awards
  • Top team are invited to an awards banquet
  • Medals
  • Certificates
  • T-shirts

Top team in the state wins a trip to NYC to tour
the NYSE
8
Rules of The Stock Market Game
  • Each team begins the simulation with 100,000 in
    cash and may borrow additional funds. How much
    you may borrow is dependent upon the equity in
    your account. (25 equity rule)
  • Real Time Game transactions for stocks are priced
    at the market price at the time of entry
  • All Stock and Mutual Fund buy orders must be a
    minimum of 100 shares.
  • SMG does not permit buying stocks or mutual funds
    that trade below 5 per share.
  • A 2 broker's fee is charged for all
    transactions. For example, if you buy 100 shares
    of a stock at 10 per share, you must pay the 2
    of 1000 or 20.
  • Interest is charged weekly on negative cash
    balances at an annual rate of 7.00Positive
    balances earn at an annual rate of 2.00.
  • Stock and cash dividends and stock splits are
    automatically computed into portfolios.
  • These are just a few of the rules.
    Complete rules are available on the SMG website.

9
Student Portfolio
Always check the Team Information box to be sure
you are in the right Region and Region Trade Type.
Student Teams have access to a simulated real
world online trading portfolio.
10
Placing a Trade
11
Account Holdings
12
Account Summary
13
Rankings
14
Help!!!
  • Click on the ?

15
Teacher Support Center Provides
  • Online teacher training and technical assistance
  • Lesson plans and teaching resources
  • Team management tools
  • Up-to-date SMG program news

16
InvestWrite
  • Critical thinking component to SMG.
  • Builds a bridge between classroom learning and
    the real world
  • A method of assessing individual student
    performance through writing.
  • Provides incentives for student achievement
    through awards and prizes.
  • Available only to registered SMG teachers and
    their teams.
  • Learn more at www.investwrite.info.

17
Getting Started
  • What is a Stock?
  • Types of stocks
  • How to read a stock table/quote
  • P/E Ratio
  • How to research a stock

18
What is a stock?
  • Private ownership is fundamental to the operation
    of a market economy.
  • Individuals can become owners of a business by
    purchasing stock.
  • People who buy stock in corporations are owners
    of that corporation. They risk their money
    (personal wealth) on the success of the business.
  • Any business is risky because the future is
    uncertain. The owners of the business bear that
    risk. If the business succeeds, the owners
    benefit.

19
Types of Stocks
  • Common Stock
  • When people talk about stocks they are usually
    referring to this type.
  • The majority of stock is issued is in this form.
  • Common shares represent ownership in a company
    and a claim (dividends) on a portion of profits.

  • Investors get one vote per share to elect the
    board members, who oversee the major decisions
    made by management.

20
Types of Stocks, cont.
  • Preferred Stock
  • Preferred stock represents some degree of
    ownership in a company but usually doesn't come
    with the same voting rights.
  • Investors are usually guaranteed a fixed dividend
    forever.
  • In the event of liquidation, preferred
    shareholders are paid off before the common
    shareholder (but still after debt holders).
  • Preferred stock may also be callable, meaning
    that the company has the option to purchase the
    shares from shareholders at anytime for any
    reason (usually for a premium).

21
How To Read a Stock Table/Quote
22
P/E Ratio
  • The P/E looks at the relationship between the
    stock price and the companys earnings.
  • The P/E is the most popular metric of stock
    analysis, although it is far from the only one
    you should consider
  • You calculate the P/E by taking the share price
    and dividing it by the companys EPS
  • P/E Stock Price / EPS
  • For example, a company with a share price of 40
    and an EPS of 8 would have a P/E of 5 (40 / 8
    5).

23
What does a P/E ratio tell you?
  • The P/E gives you an idea of what the market is
    willing to pay for the companys earnings.
  • The higher the P/E the more the market is willing
    to pay for the companys earnings.
  • What is the right P/E? There is no correct
    answer to this question, because part of the
    answer depends on your willingness to pay for
    earnings.

24
Researching Stocks
  • Get Ideas from Everyday Life
  • Look at the companies around you. 
  • Is there something that really stands out to you
    as a great product idea? 
  • Is there a particular company that's doing very
    well? 
  • Is there a market that you think is being
    underserved and has room for a lot of growth? 
  • Follow up with research.

25
Researching Stocks, Cont.
  • Form an Investment Opinion
  • Simply locating companies that are doing well
    isn't enough. You have to be careful not to pay
    too much.
  • Learn more about the company and the risks it
    faces. 
  • Read a few news articles to hear what journalists
    are saying about the company. 
  • Once you have a good sense of the quality of the
    business and the future going forward, compare it
    to some of its peers. Look up the P/E ratio. 
  • Everyone has his or her own investing strategy,
    so you have to determine the value of the stock
    to you. 

26
Researching Stocks, Cont.
  • Once You Find a Stock, Keep up to Date
  • Look for newly published news articles
  • Track the price of the stock in your portfolio

27
Registration
  • You must first complete a teacher training
    workshop. Details at http//economicswisconsin.org
    /teach/stmkt_sim.htmworkshops
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