 This game only lasts 12 weeks!  You’ll be asked to “TIME” the market! You won’t be rewarded for being a long-term investor! Later we’ll teach you how.

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Presentation transcript:

 This game only lasts 12 weeks!  You’ll be asked to “TIME” the market! You won’t be rewarded for being a long-term investor! Later we’ll teach you how to be a long- term investor. Right now we’ll just try our hands at trading stocks short- term

What does it mean to own stock in a company? It means YOU are an OWNER of that company! You get to vote on company decisions like the members of the board of directors! I work for you! Larry Ellison, CEO, Oracle Corp.

How do shareholders get rewarded for owning stock? Two Ways--- 1.Rise in Share Price (this one everybody knows) 2.Dividends (don’t forget these!)

When companies have earnings they often pay a portion of them back to their shareholders These payments are called dividends Also, don’t take your dividends in cash, but “reinvest” them in stock!!

Use the Price to Earnings ratio to pick a cheap or overvalued stock!! P/E Ratio = Price per share/earnings per share Stocks with High P/E’s considered overvalued. Stocks with low P/E’s undervalued

Charles Schwab Client Center Screen clipping taken: 3/31/2014, 3:59 PM

 1. Companies can go bankrupt.  2. You can buy stocks really high and possible never recover.

DIVERSIFYBuy A BUNCH OF STOCKS! You can even buy the entire stock market with one trade!! How?? WITH ETF’s

Charles Schwab Client Center Screen clipping taken: 3/31/2014, 4:26 PM

Eliminates the risk of holding too few assets Eliminates the risk of picking stocks. You get to “buy the whole market” with one trade. You can even diversify across regions and assets

SDS = double SHORT the stock market This “stock” goes up when the market goes down. (or vice versa)

You can try using To research. 50-Day Moving Avg

Join the trading game by clicking on this assignment and following the link to YOUR CLASS’ game.