Final Words

            Participating in “The Stock Market Game” was a very interesting experience as it helped me to finally understand how the stock market works. I learned that investing in stocks is a very tedious and time consuming job. It requires extensive research and it calls for a risk-taker personality. One cannot simply purchase stocks from a company because they think it is a trending brand name. From my experience, I learned that investing can lead you to discover thousands of companies that many people have not heard about yet but that show potential for future growth. I also gained that in order to make maximum profits, an investor must watch the stock all day long in order to sell it at its peak price before it starts crashing. This leads me to say that as every stock might increase in price, it will eventually crash. Although each “crash” varies and some may be drastic while others minor, short time selling as my group and I experienced exhibits a lot of ups and downs. Overall, I have learned how to differentiate between investor worthy stocks and how to determine if a stock is worth the investment.

            At the beginning of our journey we hoped to earn $20,000 to use for our college tuition. However, our goal was not achieved due to a number of factors. First of all, finding stocks to buy in the short-run is very difficult and requires a lot of research. Many stocks are good to buy in the long-run to invest over several years or possibly over a lifetime. Second of all, no one knows how the market will do the next day. Even if a stock seems to be sky-rocketing in value it may at any minute crash without notice. Third of all, “The Stock Market Game” does not reflect how the stock market works in the real-world. Purchases made, let’s say on Tuesday will only be processed the next day which would be Wednesday and the same applies when stocks are sold. In the real world, when a stock is purchased, the purchase is processed right away. Hence, this led to a lot of confusion as we could not fully understand how to make sure that if we a buy a stock today it won’t crash tomorrow. As a result, even though we did not reach our goal, we did make a decent amount of money from several stocks.

            I do not plan to invest in the market in the future because I simply would not want to risk my earnings to be disappointed by huge losses. In addition, since investing requires a lot of time and dedication I do not think that I would be able to commit to such a task as I have many other interests. Yes, it would be absolutely amazing to earn millions as we hear from many investor stories. However, I do not think that investing is something that I could undertake.

            To someone who is new to The Stock Market Game, I would primarily advise him or her to conduct research on every stock before deciding to invest in it. Research, I believe, is the most important factor in successful investing. In addition, I would also advise him/her to understand all the different terms concerning each stock such as the P/E ratio, Trailing P/E, Forward P/E, PEG ratio, Book value, etc. These terms are really helpful when making a decision whether you should buy a stock. Lastly, I would advise him/her to try investing in a variety of companies in which some may deal with technology, others with vacation resorts, while others in material goods. Overall, I wish them luck!

                                                                               ~Ruta

While playing The Stock Market Game, I have learned much about the actual stock market, the trends that often occur, and the extensive research that one needs to do when investing in a stock. For instance, one of the main aspects of the stock market that I have learned is that it is an absolute necessity not only to know how well the stock has been doing recently, but whether it has a history of declining sharply, increasing sharply, or remaining constant. This will essentially help investors take note of whether they will be making the amount of money they intend to earn while investing and if they think it will be more efficient to take risks or, rather, “play it safe”. Additionally, I have learned that one must always be up to date with recent articles on the company or product they are investing in, which usually discusses negative press such as NSA spying with AT&T phones, or positive press such as the film “Frozen” being the highest grossing film for the Walt Disney company. I feel that this is the most essential part of investing in the stock market because knowing why a stock is doing well, or doing poorly is just as important as the actual profit earned, in order for one to predict whether they should continue investing in that stock, buy more shares, or just sell the stock altogether.

Initially, going into the game, we wanted to make about $20,000 for college tuition as quickly as possible. Therefore, our team’s goals were to buy cheap stocks, and not take the risky route, which we managed to do by investing in mainly technological companies that are usually always consistent and always produce innovative products that are in high demand. However, despite buying several stocks that were profiting well, and doing a lot of research, we did not reach our goal, simply because the stock market is very unpredictable, even if the stocks you are investing in are relatively consistent. In fact, there would be days, in which all of our stock prices would drop drastically and we’d lose a lot of money. We have even had to sell certain stocks upon realizing that we would be losing more money than earning, if we were to keep them. Furthermore, despite being an informative game, due to the stock market’s unpredictable nature, I do not see myself investing in the market in the future.

I feel that unless one has a stockbroker to manage their stocks and research current market trends for them, investing in a stock can be a very grueling process. Similar to the game, an investor may experience great losses, however, these losses will have an actual financial consequence if an investor does not know the tricks or strategies needed in order to make a profit in the market, such as short-selling. Although I do believe that some people will be able to end up very profitable from the stock market and will probably earn enough to buy a new car, or home, or pay off their student loans; there is simply too much risk in investing your money in something that can never truly be a sure thing.

My main advice to a newcomer in the SMG game is that simply because a product or company is currently popular in the media, or is well known, does not mean you should invest in it. Often times, those stocks tend to be the quite inconsistent and will drop immensely, for example, Facebook or Twitter. Finding the best, or most efficient stocks that will achieve your goals takes a large amount of research and you need to be willing to invest in corporations that are not necessarily highly advertised, or popular in the media. Like I have mentioned previously, the corporations that are most in demand involve technology, manufacturing, or energy resources. As an investor, one needs to be open to a variety of options for the best outcome. 

                                                                      ~Joel

Participating in the Stock Market Game was a very informative experience, and a rather close simulation to purchasing and selling stocks in the real world. In every aspect it was excellent preparation for our future, as we were as a group given a large sum of money, with the ultimate goal to make more money that we started off with. For me personally, it exemplified the instability of the stock market, since there was no way to know for sure whether the price of a stock would go up or down. Many stocks that we thought would do well ultimately ended up making us lose money, and vice versa. I also learned that before buying a stock, or selling one, it is very important to read about the surrounding information regarding that stock, and how the company is doing outside of stocks, as very often one affects the other. Another important thing to look for when buying a stock is the indicators, for example yearly high and yearly low, as they will help extrapolate how the stock will do the rest of the year.  

Our goals for the SMG were to end up with a profit of 20,000 dollars, but despite our research and hopeful predictions we were not able to meet that goal. Even though we attempted to extrapolate the data given by the stock tickers, because of the fact that the stock market is so unreliable and fickle, our predictions were not always accurate. In addition, we should have made a little more risky transactions, because those transactions though risky usually have a more significant profit in the end. However, in the end there were points where we were able to make more money that we started with, and that is good experience for all our expenditures in the future.

Based on my experiences with the SMG, I will most likely invest in the stock market when I have the opportunity to later in my adult life. More specifically a stock that is in the blue chip market, as they are very reliable and after a long time can produce a large profit. Most of them are relatively cheap, and very rarely cause financial dilemmas. One of these stocks include WalMart, which has been increasing in price steadily since the 1980’s, which is why the earlier you buy a blue chip stock, and the longer you keep it before selling, the larger the investment and end profit is. If I do decide to invest in the stock market, my strategy will reflect the plans that our group had during the SMG. I intend to purchase safe stocks, and make long term investments, to ensure that the probability of making a profit is as high as possible.

            The main advice that I can give newcomers to the game is to be as flexible as possible, since the stock market is constantly changing. Even though I think that it is very important to have a general strategy, the situation may call for the strategy to be broken, and to react accordingly. For this reason, a good idea is to have a schedule for the group members to check the stocks. That way, the stocks are always being looked at, so if a certain stock either goes rapidly up or down, the group as a whole will be able to handle the situation appropriately. That being said, cooperation is very important, because members need to find a way to communicate their ideas and intents, because everyone may not always agree with purchasing a stock, or selling a different one.

                                                                      ~Vlad