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Introduction

Ever think making money in the stock market is easy? Well here's your chance to try it. You have just received $10,000 from an inheritance left to you by your Grandfather. Wanting to ensure you are a responsible person, your Grandfather left you an extra $40,000 for you but under one condition... you must earn $500 profit in one month on the original $10,000 by investing it into the stock market. It is up to you to decide the best and fastest routes to turn a profit. Good Luck!

Task

You will be given $10,000 of "play money" deposited into a Money Market Account earning 3% interest compounded daily. You will invest this money in the stock market for a period of 1 month. The goal will be to make at least $500 profit by the end of the 1 month period.

Helpful hints:

Do some research of current news activity that might affect the stock, i.e., layoffs
Can the time of year benefit you, i.e., the holidays, energy stocks in Winter months or housing stocks in Summer months?
Is it best to play it safe and keep some money in the Money Market Account earning small but guaranteed money?

Process

Start by selecting up to 3 stocks from the NYSE. Which stock(s) to purchase and the total quantities of shares of each stock is up to you as long as you do not exceed the $10,000 limit in purchases. Be sure to use the links in "Resources" for your research.

You will be required to track the selling price of each of your stocks EVERY DAY (M-F). Use the attached worksheet for your record keeping.

You may sell off shares of your stock(s) as often as you like and purchase a different stock. However, each trade will cost you $20.00.

The game will start April 1st. All shares will be sold off at the April 31st stock closing cost. This money will be redeposited back into the Money Market Account, rounded to the nearest dollar.

At the end of the project, each student will submit a paper and presentation including the following:

A graph of each stock outlining the daily movement of the stock price. Keep all 3 stocks on the same graph.
Compare your progress to that of the Dow Jones Industrial Average by graphing the DJIA movement on the same graph. What does the trend show you of each graph? Did you exceed the DJIA trend? Did your stocks earn more for you than if you invested in the DJIA?
Add a regression line to best fit the data. Predict what the stock price will be 1 month from now, 6 months from now, 1, 5, 10 years from now.
Discuss why you chose the stocks you did? What did your research tell you? If you sold stocks during the course of the month, what led you to do that? If you could start over, would you choose the same stocks, different stocks in the same industry, or different industries altogether?
Discuss your thoughts on playing it safe by leaving some funds in the Money Market Account.
Acting as a Financial Advisor, write a summary paragraph based on what you learned in order to help a friend make a profit in the stock market.

Each student will present their approach and findings to the class with a 5 minute Power point presentation.

Click here for Rubric

Conclusion

You have hopefully seen how investing in the stock market can be both beneficial and risky. The importance of sound research should not be understated. It's never too late to start investing. There are many online sites that offer quick and easy trading options for those with the drive to become RICH! Consult your parents and a financial advisor in order to help you with your portfolio. Good Luck and Have Fun!

CREATED	November 18, 2005
LAST UPDATE	December 13, 2005
CREATED BY	Russ Conte

Introduction

Task

Process

Resources

Conclusion

For Teachers