The Stock Market Game

You will be playing a stock market simulation called the Stock Market Game Program.  The SMG begins Monday February 14 and ends Friday April 22.   Each of you is on a team and each team will start with $100,000 to invest in the stock market.  You will always login to the SMG at www.stockmarketgame.org   by entereing your ID and password. Do not click on the registration link, since you are already registered. You will need to have your  ID and password in order to enter the site.  BE SURE NOT TO GIVE ANYONE YOUR PASSWORD. 

The goal is simple:  Try to make as much money as possible in the 10 weeks of the SMG.  You can buy any stocks listed on any US stock exchange, which will essentially be the NYSE, the American, or NASDAQ.   When you buy, you have to buy a minimum of 100 shares.  You can buy 100 or 137 or 1,286 shares.  You cannot buy 95 shares.  You can sell any number of shares.  Any transaction will cost you 2% of the value of the purchase or sale.  So a purchase of $25,000 of stock will cost you an additional $500. 

Note: You can only buy stocks that are selling at more than $5

For those of you who are risk-takers, you can learn about buying on margin and selling short and you can use those tools.

You don’t have to sell all of your shares at the end of the game period.  In fact, it’s too your advantage not to since if you don’t sell you won’t have to pay any commission.

Each team will be required to participate and write a short 3-4 page paper about the Stock Market Game experience (due April 29) that will be worth 5% of your grade.  In your paper will discuss the following:

            What stocks did you buy?

            Why did you think those stocks were good for your portfolio?

            If you sold any of the stocks you originally purchased, what factors led you to sell?

What economic events, events in the news, general macro economic conditions or changes in the macro economy, or firm-specific issues were you expecting to happen that would affect the companies you purchased?

            What macroeconomic events or conditions or issues actually did happen that affected your stocks? 

            How would your decisionmaking about what stocks to buy (or sell) have been different if you were investing for 20 years?

Students on the team that gets the highest return on their initial investment of $100,000 will receive 10 extra points on their 100 point final exam grade for the course.  The second place team members will receive 8 extra points, the third place winners 6 extra points, and the fourth place winners will receive 4 extra points.