Virtual Stock Exchange
Portfolio Management Project
Purpose
The purpose of using Virtual Stock Exchange is to give you a better understanding of trading strategies and portfolio management. You will also learn a variety of financial instruments and their risks and rewards as they apply to asset management. In this case, we will imagine that you have either saved or been entrusted by a group with $100,000.00 to invest, exploring various options and deciding how much risk you are willing to assume in a roughly 8 week period.
Registration
· To create a new account, go to http://vse.marketwatch.com
· In the middle-right part of the header, click “log in.” Then click “Register.”
· Enter your first name, last name, an email address you use, and a password.
o Use an email you have access to right now.
o You probably want to uncheck all the boxes under “communication preferences.”
o Click “register now.”
· Marketwatch.com will send you an email confirmation link. It may take a few minutes; if it takes more than 5 minutes click the “resend” link on the right side of the marketwatch webpage.
· Once you have registered, go tohttp://www.marketwatch.com/game/bhssp2014 (or http://bit.ly/bhsecon14)
o This link opens the “welcome” page. In the middle of the screen there should be an “about this game” box. Enter the password in the box: spartan and click join.
Navigation
· Welcome
o Shows you some quick stats about your portfolio. Everybody starts with $100,000 to trade.
o The bar labeled “portfolio allocation and performance” shows all of the different stocks you own. Right now you don’t own any. Once you purchase some stocks, this bar will show you at a glance how well your portfolio is doing – the stock is colored red if it lost money today, and green if it earned money.
o The welcome menu also shows you the top ranked players. If you click on a player’s name you can access their portfolio.
· Trading
o You have several options for deciding which stocks to buy. On the main page there are 20 stocks that have recently been in the news. You can also search in the box by company name or symbol if you have a specific stock you’d like to purchase.
o To purchase a stock, drag the icon over to the “Trading Card” and let go.
§ Move the slider that says “___ Shares” to decide how many you would like to buy, and click “submit trades.”
§ You can buy multiple stocks at once.
§ If you buy several stocks at once, you can choose to “distribute equally” – you buy an equal amount of every stocks.
§ Note: Sometimes the website doesn’t recognize a trade. Always check your portfolio after you’ve made a trade, and if it doesn’t work you’ll have to try again later.
· Ranking
o This is where you can see the ranking of all students in economics this semester. If you click on a student’s name you can see what’s in their portfolio.
· Portfolio
o Here is where you can sell your stocks. Find the stock you would like to sell, and click the blue “trade” button on the middle-right side of the screen.
§ A pop-up box will come up that lets you decide how many of your stocks to sell. You can sell all of your stocks or just a portion. Click “submit order” when complete.
Rules
· Trading only occurs during regular stock market hours (7:30 a.m. to 2:00 p.m. our time, and only on Mondays-Fridays). You can submit changes to your portfolio after hours, but the changes will not be submitted until the next time the market opens.
· The stocks you buy must be worth a minimum of $2.00, and a maximum of $500,000.
· Every time you buy or sell stocks, you must pay a $10 commission – be careful about buying and selling too frequently, or you will lose money in commission fees.
Strategy
· You will want to check your stocks frequently, and outside of class – at least once a week, but probably more if you want the prestige of making the most money and the envy of your peers, or if you’re using this for your project.
· Try to have at least 5-10 different stocks in your portfolio. Fewer than 5 stocks and your portfolio might collapse if a bad event happens.
· Try to have many different types of stocks in your portfolio – stores, banks, manufacturing, transportation, high tech, healthcare, utilities, and so on.
o Remember how complementary goods can affect each other. Bad news for one computer company often means bad news for all computer companies, and that can hurt your portfolio.
· The most successful portfolio managers will follow current events for news about how certain companies are performing in the market. Sources that may be particularly valuable for your research include:
o MarketWatch: http://www.marketwatch.com/
o Wall Street Journal:www.wsj.com
o Yahoo Finance: finance.yahoo.com
o Daily Treasury Yield Curve Rates: http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
o Walker Management Library: Walker Management Library Research Links for Managerial Studies Students
o (Look for “top news” or “top stories” to see which companies are doing very well or poorly and adjust your strategy if necessary.)
· We will occasionally work on our portfolios during class, but it is up to you to manage your portfolio on your own.