Week 6: Final Construction of a Portfolio & Power of Compounding

Aims and Preparation

Synopsis: Taking the analyses the students have made from Week 5 & 6, the students now will compile their final portfolio.

The aim of “power of compounding” lesson is to show the group that when a successful portfolio is worked on and selected, compounding can take its size to significant levels.

TY Objectives: Draw on previous analyses

Form opinions on colleagues’ recommendations

Calculate quantities

Create a profile on Yahoo Finance

Complete a worksheet with compounding exercises

Engage with the concept of a pension

Props: Provided Slides and Notes

Provided Videos

Worksheet & Solutions

Homework: Class 1: Dissertation of activity

Class 2: Review the “Power of Compounding” questions


Teacher Guidance

Class 1 “Construction”

Suggested Timing / Activity / Comments
10 minutes / Explanation of the Activity / Explain to the class that now they are to go on Google Finance and create a watch list. The resources that they are to use include the list of stocks they chose from the “Dividend Yield” as “Valuation” lessons as well as the mini project of profiling a stock.
20 minutes / Activity: Construction of a Portfolio / They need to create a “portfolio” online, by setting up an account on Google and find the stocks they are interested in. If they had €100,000, what would their simulated portfolio look like – they have the prices in front of them and know where to find the dividend.
20 minutes / Dissertation: Why did you choose these stocks? / Write an account of;
·  Why you picked your stocks
·  How many stocks you picked and why
·  What dividend you’re expecting
·  What percentage of the portfolio is spent on transaction costs (€30/trade)
·  Is there a strategy involved? What is it?

Please refer to the “Google Finance” video on the website which illustrates step-by-step how to register, create and edit a profile.

Class 2 “The Power of Compounding”

Suggested Timing / Activity / Comments
15 minutes / Formal Teaching: The Concept of Compounding / Explain how a concept that they have already learned in Junior Cert Maths is applied in reality through the development of a portfolio.
20 minutes / Activity: Compounding Worksheet / Give each student the worksheet and ask them to complete the exercises.
5 minutes / Solutions / Take the class through the solutions of each question.

Please refer to “Power of Compounding” PowerPoint Presentation with the accompanying notes. The Worksheet and Teacher’s Solutions are also needed for this class.