Investing Basics – Stocks, Mutual Funds, Trading, and Retirement

Investing Basics – Stocks, Mutual Funds, Trading, and Retirement
This lesson plan was created by Andy Webb, of Monticello CUSD. The lesson plan includes a PowerPoint and several hand-outs.
I use How the Market Works as a supplement to my Consumer Education class. Most of my students don’t really understand what a stock or a mutual fund is much less how the companies are priced. I have a unit where I ask the students to invest in the stock market using How the Market Works and the competition lasts several months until there is a winner. The winner for the semester gets their name put on the trophy. This is highly coveted! I have attached the powerpoint that I use when I am teaching students about the different types of investing and investment products. We are on block schedule. The powerpoint has a day by day breakdown of what I do in my classes. Furthermore, I have attached all of the different handouts I have created.
   

Handouts

Portfolio Management Project – Parts I, II, III

Portfolio Management Project – Parts I, II, III
This project was submitted by Linda Campbell, a professor of business administration and management at Siena Heights University

Project Overview and Goals

The purpose of using Virtual Stock Exchange is to give you a better understanding of trading strategies and portfolio management. You will also learn a variety of financial instruments and their risks and rewards as they apply to asset management

Parts I and II:   Managerial Finance Project– Registration

Registration for How the Market Works is free. Create a login code.   Choose a name I can identify as yours – keep a copy of your sign in name and password. Instructions to register for our classroom contest:
  1. You are invited to enter the contest, “Managerial Finance”.  The Password for this contest is:  ___________:  Go to the following website: __________________
  2. My Dashboard – Click on  Contests; click on Join; Click on Search (and find our class contest by name: “Managerial Finance”  Our Password for the contest is:
  • Begin Part I of “Managerial Finance”. Complete all Assignments – take quiz – be sure to follow instructions to get credit
  • If Dashboard is not visible, Click on “Choose Assignment” and scroll down to complete additional assignments.
Additional Information:
  • Portfolio Management Constraints:  Cash must not exceed 20% of your portfolio at any time.  We want you invested, not sitting on the sidelines.
  • This is a six-week assignment with a one-week intermission between Parts I and II.
  • Part I is a two-week simulation and is your introduction to HTMW.  You will complete all the assignments and required stock trades. At the end of Part I, your portfolio balance will be reset.
  • Part II is a four-week simulation.  You will use your experience from the Part I to make more knowledgeable investment decisions.
  Managerial Finance –  Part I:  Two-Week Stock Simulation
Week 1   Register and begin assignments – be sure to make at least three stock trades  – Due ___________
Week 2   Complete assignments and be sure to make at least three stock trades.  Due _______________________
Week 3 Intermission: Finish up and evaluate your trading portfolio.  Choose primary stocks you wish to trade during Part II By Thursday, all balances will be reset and your trading activities from Part I will be erased.  You will have a fresh start.   Now you are ready for Part II.
  Part II:  Managerial Finance Project – All balances have been reset!
Week 4 Begin assignments – Two articles and a minimum of three stock trades – Due  __________
Week 5   Complete assignments – Two articles and a minimum of three stock trades. Due _________
Week 6 Complete assignments – Two articles and a minimum of three stock trades. Due _________  
Week 7 Complete assignments-  Two articles and a minimum of three stock trades. Due _________  

Part III – Virtual Stock Exchange Debrief Paper – Due ______________

A 2-3 page, double-spaced paper about your Virtual Stock Exchange experience will be due at the end of the semester.  Please address the following:
  • What are the key things you learned from your Virtual Stock Exchange experience?
  • What companies did you invest in?  How did their stock perform?
  • Which transactions exceeded your expectations?  What conditions caused this?
  • Which transactions underperformed for you?  What factors created the performance gap?
  • How will your Virtual Stock Exchange experience influence your personal investing in the future?
  • How did you do in the rankings with your classmates?
 

Core Stock Market Project

Core Stock Market Project
This project is the “Core”, which most teachers use as the basis for their HTMW class stock game. The other recommendations in this library usually follow this format (with some variation). This makes it very flexible to work with your classes. This project usually runs between 4 and 16 weeks. Longer contests tend to work better. This is because students are exposed to more “market news” for a longer time, and is a better introduction to “real” investing outside of the classroom.

Project Overview

The goal of this project is to introduce students to basic investing concepts, and get exposure to the real-world financial markets. Each student will build their own portfolio of stocks and mutual funds, with a set of initial investing goals, and regular investing journal entries. At the end of the session, students will create and present a 5-10 minute presentation to the class. The presentation should discuss the goals they set, and how they worked with the changing markets over the course of the contest. Students will also need to submit a report detailing their trading activities.

Project Set-Up

Contest Rules

Use these settings to set up your class contest:
  • Initial Cash: $100,000
  • Registration/Trading Dates: as long as your class allows (we recommend starting this project early – likely before your discuss investing in detail in the class itself)
  • Minimum Prices: $3
  • Short Selling: OFF
  • Day Trading: ON
  • Margin Trading: OFF
  • Public Portfolios: OFF
  • Allow US Stocks and Mutual Funds
  • Commission: $10/trade
  • Position Limits: 20% (students can’t invest more than 20% of their portfolio in any single stock)
  • No resets
  • Create an assignment
  • Keep the teacher in the rankings
  • Require Trading Notes
You will get a unique registration link to share with your students – this will let them create their login and join you into your class.

Assignment

You should also add an “Assignment” to your class. Your first “Assignment” should last the first week of the trading period, and include the 10 items in the “Stock Market Basics” section. These are designed to provide students with a basic introduction to what a portfolio is and how to make trades, with short articles, videos, and tutorials. You can create more assignments for each week, including other tasks that align with what you are discussing in class. Most classes assign the next 10 items, under “Intermediate Investing Tips”, as the second week’s assignment.

Project Kick-Off

Kick off the project using our Cornerstone Lesson Plan – this is a short introduction to glossary terms and the concepts of stocks of investing. At the end of the lesson, have students create their logins for your HTMW class contest, and work through the first 10 “Stock Market Basics” lesson. This should usually take about 1 hour. Next, introduce your students to a few “Scenarios”. These will determine the kinds of portfolios they will build. They can choose between:
  • A retirement portfolio – the goal will be constant, slow growth, with an emphasis on avoiding losses (a portfolio for someone who wants to retire in 15 years)
  • A growth portfolio – the goal will be high growth with some risk (a portfolio of someone in their 20’s or 30’s looking for high returns)
Now put students into groups of 3-5, based on which scenario they chose. Have each group prepare a list of 10 ticker symbols (ideally from at least 3 different sectors) of companies that they are familiar with, and that they think will perform well for their scenario. Students can find the ticker symbols, sectors, and performance charts for all US and Canadian stocks in the “Quotes” tool on HTMW. This should take between 30 and 45 minutes. Then break up the groups, and have each student individually should pick 5 of these companies, and add them to their HTMW portfolio. Each student should also write a 1 page summary about why they chose the companies they did, and why they DIDN’T choose the other 5 companies the group identified (this can be homework). This ensures each student will have a unique portfolio, but based on some group thinking.

Weekly Check-In

Ensure all students are checking their HTMW portfolio at least once a week (with the class rankings, most students will be checking a lot more often!). You can post the class rankings at the front of class to make sure students are staying engaged. You will also want to encourage students to continue trading for the duration of the contest. Require students to make at least 3 trades in their portfolio each week (you can require this with an Assignment), and they should both be keeping Trade Notes with each trade, and a 1 paragraph Trade Summary that gives a short summary of what happened in their portfolio each week. This summary should include things like what stocks did well, which did poorly, how did market news impact their holdings, and how it relates back to other class topics under discussion.

Final Report

At the end of the trading period, student’s portfolios will automatically freeze, so they can continue to log in and see how they did at the end of the last day, but not place any new trades. This gives the opportunity for students to prepare a final “Investment Report”. The Investment Report should be between 3-5 pages, divided into sections.
  • A summary of their investing scenario, and how well they achieved their investing objectives
  • A graph showing their portfolio performance for the duration of the contest
  • A list of significant events during the contest that had a big impact on their portfolio (news reports impacting stock prices, ect)
  • A pie chart showing their final holdings
  • A profit/loss summary, showing where exactly they made and lost money
  • An appendix with all of their weekly investing journals

Cornerstone Lesson Plan: Introducing the Stock Market

Cornerstone Lesson Plan: Introducing the Stock Market
When introducing HowtheMarketWorks.com, students need to first have an understanding of what a company is, what a share of stock represents, and the relationships to products and services. After this is mastered, then it is easier to explain what a stock exchange is, and finally teach them How The Market Works! You can also download this lesson as a PDF handout to distribute to students. Click Here to Download

Required Vocabulary

Company

A business formed to manufacture or supply products or services for profit. Most companies are very small and have only one location like the little restaurant, dry cleaner, flower shop, or nail salon at the local street corner. Other companies have 10,000+ locations or sell their products and services globally. These may be companies you see every day like NABISCO, which is owned by a company named Mondelez International – ticker symbol that makes Oreos, or MCDONALDS .

Entrepreneur

A person who has a creative or unique vision for a product and services, and then creates and launches a business. The entrepreneur typically assumes the risk and rewards for a business venture.

Sole Proprietorship

A company owned and run by one individual who receives its profits or bears its losses. A proprietorship is not separate from its owner, who is liable for the company debts.

Partnership

A company owned and managed by two or more people who share its profits or losses. A partnership is not separate from its owners, who are liable for the company’s debts.

Private Corporation

Some entrepreneurs, sole proprietors, and partnerships decide to incorporate. This means that they establish a separate legal entity. The main reasons to incorporate are (1) if someone decides to sue the company, they would be suing the corporation and not the individual owners (2) it is easier to raise money to grow the business and (3) for tax reasons. The corporation issues shares of ownership (also called stock) to show who owns what percentage of the corporation. Most corporations don’t sell shares to the public. You can’t buy shares of a private company in the stock market. Here are some examples of what are known as privately held companies such as: CARGILL, which makes agricultural products, KOCH INDUSTRIES, which is in many businesses, such as transportation fuels, building and consumer products, and fertilizers, among others., IN AND OUT BURGER, which is a fast food chain, mostly in California, AND MARS, which makes Mars Chocolate bars and other candies.

Public Corporation

Larger companies that want to grow quickly often find it easier to sell some of their shares to the public to raise money. The stock of a public company is owned and traded by individual and institutional investors. The stock may also be held by company founders, employees, and sometimes venture capitalists, which are people who invest in new businesses that are just getting started. MCDONALDS Ticker symbol: , VERIZON Ticker Symbol: , Ticker symbol MICROSOFT are all examples of public companies that make products that you may use.
HowTheMarketWorks has built-in lessons teaching students about different types of companies! When you set up your class contest, add an “Assignment” and include the lesson “Types of Companies“!

IPO or Initial Public Offering

IPO is a term heard a lot on Wall Street and in the news. When a company decides it needs to raise more money and wants to sell it shares to the public, then it files for an IPO.

Stock Exchange

Once a company goes public, then the shares of that stock trade on one of the major U.S. stock exchanges (The New York Stock Exchange, the American Stock Exchange, and NASDAQ). The stock exchange is like a flea market where buyers and sellers come together and the buyers try to get an item for as low a price as possible and the sellers try to sell an item for as high as possible.

Stock Broker

The stock broker is the person who actually makes the trade for you. In the old days, you would call your broker with your order who would then call his trader on the floor of the NYSE who would then place your order. Today, you can use Etrade.com, Scottrade.com and other online brokerage platforms to make trades. HowTheMarketWorks.com acts just like an Etrade account, with real stocks and real prices, just pretend executions.

Sector

A sector is a group of companies that are engaged in similar businesses. For example, McDonald’s and Burger King are in the restaurant sector. General Motors, Ford and Toyota are examples of companies in the automotive (car) sector. Citibank, Bank of America, and Chase are examples of companies in the banking sector.
HowTheMarketWorks also has lessons showing students how to find stocks from different sectors, and compare them. If you add an Assignment to your class, include the lesson “How to find stocks in specific sectors“!

Investor

A person who gives money to any of the above in return for a share of the company. For example, if you and three friends pool your money to make and sell cupcakes at school, you are all investors.  

Thinking About Companies

Starting A Business

Imagine you started making cupcakes. That’s your product. You make them in your kitchen to sell them at school and your cupcakes get so popular that you couldn’t make enough of them for everyone who wants them, because your oven at home is too small. You might want to start a cupcake factory where you can make enough cupcakes to sell cupcakes to everyone who wants them. To get the money to build the new cupcake factory you would go to people who have money to invest in your business. This could be folks at the bank where you may or may not get a loan. But you have another option: you can go to the stock market and convince people to buy stock in your company. People who buy stock, which are called shares, in your company are called shareholders, because they own a fraction of your company.

What is the Stock Exchange and an IPO?

When a company goes to the stock market for the first time to raise money, it’s called an Initial Public Offering, which is also called an IPO. Companies use this money to expand their business, like building a cupcake factory. If you’re the company, you set a price at which you think investors will pay for your stock, after you release the stock into the market to let other people buy a stake in your business, which is called issuance, it is traded on an exchange. The stock’s price will rise or fall based on what investors think it is worth. There are exchanges for stock all over the world. For example, when Google went public in 2004, in other words, they did an IPO and sold shares of the company on the stock market, Google’s initial price was $85. The Google stock traded as high as $1,200 when it spun off another class of shares with $500. Today, it’s worth around $1100 to $1500. That is an incredible return on your investment. Never forget though, the first rule of Wall Street is “Let the buyer beware.” They say this because some companies lose money and eventually go out of business. This means investors’ shares in the company are then worth exactly zero. In the U.S. our largest exchanges are the New York Stock Exchange, which is also known as the NYSE, the other is the NASDAQ, which is an acronym for the National Association of Securities Dealers Automated Quotation System – it was the original computerized stock exchange in the country. The NYSE exchange is where you’ll find larger companies. It began on Wall Street in New York under a buttonwood tree where people would casually gather to buy and sell shares of companies. Today it’s much more organized. It has a building and a trading floor and is tightly regulated by the Federal government to make sure the stocks people buy are actually investments in real companies. These days, like the NASDAQ, you can also buy and sell stocks on the NYSE while sitting at your computer.
You can also add our lesson on “What is the New York Stock Exchange“, “What is a Stock“, “What is a Mutual Fund“, and dozens of others as Assignments to your class contest!
Smaller companies are generally found on what’s called the NASDAQ, although there can be big companies on the NASDAQ as well, like Microsoft (MSFT). Trading on both exchanges begins at 9:30 am ET and goes to 4:00 pm ET, every weekday, except for holidays. You may hear the term “after hours trading” if you watch some of the financial news stations like CNBC. With How the Market Works you’ll be given a virtual cash amount that your teacher choses ($10,000 to $500,000) to invest in stocks. You will buy and sell shares in the real world with your play money.

Classroom Activities

Buy What You Know!

Think about products and services that you, your family, and your friends use every month and think about where you spend their money. Is there a product that you are using more this month than you did a few months ago? Is there a new department store that you are hearing all of your friends talk about? Is there a product that’s HOT that you must have? Try to think about your spending habits in terms of what is necessary, what is nice to have, and what is more of a luxury item.
Instead of thinking “I am going to the store to buy some food”, thinking about the stock market becomes “I’m going outside in my Nike (NKE) shoes, Wrangler (VFC) Jeans, and Abercrombie & Fitch (ANF) t-shirt, to the Bank of America (BAC) ATM to get cash, then drive my Ford (F) car rolling on Goodyear (GT) tires with BP (BP) gas to Walmart (WMT) to buy Charmin (PG) toilet paper, Crest (PG) toothpaste, Coca-Cola (KO), and Ben and Jerry’s (UL) Ice Cream. Then I am stopping by McDonalds (MCD) and Walgreen’s (WBA) pharmacy for grandma’s Lipitor (PFE) prescription and some Revlon (REV) lipstick!
Now make a list of at least 10 different companies whose products or services you might purchase. Using the HowTheMarketWorks company lookup, see if you can find the stocks of these companies. You might have to use Google or Yahoo to find out “Who makes Oreos” or “Is Kroger a public company?” Once you’ve identified several public companies, look them up in the Quotes tool (we make it easy – students can search either by company name or ticker symbol):   Investigate their charts to see which stocks have been going up in value over the last few months or years. Then click “Company Profile” on the right side of the page to find its sector and industry: Now it is time to start building your HTMW portfolio! Try to pick 10 companies that are growing over the last 2 months, and include at least 5 different sectors in your picks.
To help understand why picking different sectors is important, you can include the lesson “How do I diversify a portfolio?” as one of your Assignments!

 

Teacher Help

For best impact with this (and our other) lesson plans, we recommend setting up your class contest on HTMW before you begin – click here to see how! The most successful stock games usually have students work individually – this introduces more accountability for the students, gets each student more involved in the Class Rankings (which will definitely become a highlight of the class), and lets you take advantage of the Assignments feature. However, many teachers prefer students to work in groups – the optimal group size seems to between 2-3 students. You can also mandate students keep Trade Notes – a short, 1-3 sentence explaining the rationale behind every trade. This is very helpful to ensure students are thinking through their decisions, but also is very handy when it comes to making reports about their trading activity (see some of our other lesson plans for help). Finally, to get the most out of HTMW, you should also take advantage of the Assignments tool. This will let you assign videos, articles, trades, and interactive calculators. Many of these lessons focus on the stock market, but there is also an extensive library covering personal finance, economics, and business topics – letting you pick and choose lessons that line up with what you are covering in class each week. If you want to take your classes to the next level, you can also upgrade to PersonalFinanceLab.com. PersonalFinanceLab has a more robust stock market game (with no ads), and a curriculum library of over 300 lessons, all with built-in, automatic assessments aligned to both state and national standards for personal finance, economics, accounting, management, marketing, and finance.

New Feature – Public Portfolios!

New Feature – Public Portfolios!
One of the most common requests we get from teachers is if students can see each other’s trades. Well, now they can!   We added a new contest rule, called “Public Portfolios”. If you turn on public portfolios for your contest, there will be a new “View” button on the rankings page next to each participant. This will let each participant see each other’s trades, open positions, trade notes, and more! If you created your class contest before Public Portfolios were added, this is turned off by default. However, you can add it by editing your class rules, and setting “Public Portfolios” to “Yes!” Click Here To Create Or Edit Your Class Happy Trading! PS. You must read this–If you are looking for stock ideas, we have also just published a complete Motley Fool Stock Advisor Review to share our experiences with their popular stock advisory service. You won’t be disappointed.

Cryptocurrency Trading Has Arrived

Cryptocurrency Trading Has Arrived
One of the most-requested new features in Spring 2018 was cryptocurrency trading, both from students and teachers. You asked and we listened – crypto trading is now available on HowTheMarketWorks! crypto Cryptocurrencies currently share some of the rules from Stocks, such as the commissions and position limits. However, you can trade cryptos both using a quantity (such as 10 “coins”), or specify a dollar amount (“I want to buy $25,000 worth of Bitcoin”). If you are creating your own contest, you can choose whether participants can trade cryptocurrencies (we have them turned off by default): crypto point You can toggle this on or off from your “My Contests” page, and clicking “Edit Contest”.   Happy Trading!

Videos Page Update!

Videos Page Update!
With our most recent update, the HTMW videos page got a great new revision – with each video getting a bigger window and better navigation! htmw video   This also means if you create a HTMW Assignment, the links to view each video will now take your students right to the video they need! Happy Trading!

Editing Assignments!

Editing Assignments!
You can now edit your assignments on HowTheMarketWorks! In the past, once you created an assignment it was set in stone. With the newest HTMW update, you can add and remove tasks in real time, giving you more control of your class than ever before! house   To edit an assignment you’ve already created, go to your “Manage Assignments” page and click “Edit”. Click on the green “plus” button to add an item not currently in the assignment, or the red “minus” arrow to remove tasks. Happy Trading!

Using Spreadsheets – Graphing

Graphing is one of the most important features of spreadsheets. When you need to present your findings, whether as a written report or a presentation, summarizing your data in graphs is the best way to quickly communicate large amounts of data. This guide will walk through taking your raw portfolio data, making some simple calculations, and transforming the data into graphs that you can include in reports.

Line Graphs

Your Daily Portfolio Value

First, we want to make a line graph showing our daily portfolio value. First, open your spreadsheet that has your daily portfolio values, it should look something like this: portfolio values Portfolio values are calculated at the end of the day when the market is closed and all your assets (Stocks and Mutual Funds strictly on this site) are summed together which shows your ending portfolio value. To insert a basic line chart of your portfolio data, highlight your data and click “Insert” in the Office Ribbon, or “Charts” in Google Sheets: highlight data And that is it! Your new chart is ready for display. You can even copy the chart and paste it in to Microsoft Word (if using Excel) or a Google Doc (if using Google Sheets) to make it part of a document, or paste it into an image editor to save it as an image to be used for any reports you might have it to use.
portfolio value chart
Microsoft Excel
sheets graph
Google Sheets

Portfolio Percent Changes

Next, we want to make a graph showing how much our portfolio has changed every day since the tournament has began. To do this, first we need to calculate the daily % change, instead of just our raw portfolio value.

Basic Calculations – Using Formulas

In the next column we will calculate our daily portfolio percentage change. First, in the next column, add the header “% Change”. new column heading Now we need to make our calculation. To calculate the percent change each day, we want to take the difference between the most recent day’s value minus the day before, then divide that by the value of the day before.

Percentage Change = (Day 2’s Value – Day 1’s Value) / Day 1’s Value

To do this, in cell C3 we can do some operations to make the calculation for percentage change. To enter a formula, start by typing “=”. You can use the same symbols you use when writing on paper to write your formulas, but instead of writing each number, you can just select the cells. To calculate the percent change we saw between day 1 and day 2, use the formula above in the C3 cell. It should look like this: Now click on the bottom right corner of that cell and drag it to your last row with data, Excel will automatically copy the formula for each cell: percent change 3 You now have your percentages! If you want them to display as percentages instead of whole numbers, click on “C” to select the entire column, then click the small percentage sign in the tools at the top of the page: percent change 4

Selecting Certain Columns For Your Graph

Now we want to make a graph showing how our portfolio was changing each day, but if we try to do the same thing as before (selecting all the data and inserting a “Line Chart”, the graph doesn’t tell us very much: This is because it is trying to show both the total portfolio value and the percentage change at the same time, but they are on a completely different scale! To correct this, we need to change what data is showing. If you are using Excel, right click on your graph and click “Select Data”: select data This is how we decide what data is showing in the graph. Items on the left side will make our lines, items on the right will make up the items that appear on the X axis (in this case, our Dates). Uncheck “Portfolio Value”, then click OK to update your graph: bad axis For Google Sheets, this is done similarly, right click on your graph and select “Data Range” (the letters for this example will be the same as Excel, C2:C6)   This is closer to what we’re looking for, but the axis labels (the dates) are right in the middle of the graph, making it hard to read.

Formatting Your Line Graph

Now we want to move the dates to the bottom of the graph (here they are along the “0” point of the Y axis). To do this in Excel, right-click on the dates and select “Format Axis”: excel format A new menu will appear on the right side of the screen. Here, click “Labels”, then set the Label Position to “Low”. formatting 2 The method is similar on Google Sheets as well, start by selecting “Axis” then “Horizontal” or “Vertical” Axis to edit them. With this feature you change the axis titles and add different features to it. sheets format Congratulations, your graph is now finished! You can now easily see which days your portfolio was doing great, and which days you made your losses.

Bar Charts and Pie Charts – Your Open Positions

Next we would like to make a bar chart showing how much of our current open positions is in each stock, ETF, or Mutual Fund.

Directions for Excel

First, open your spreadsheet with your Open Positions. It should look something like this: b1   Since we want to make a bar chart, we can only have two columns of data – one for the X axis, and one for the Y axis of our chart. We want one column showing the symbol, and a second column showing how much it is worth. The “Total Cost” column is the current market value of these stocks, so that is the one we want to keep. However, we don’t want to delete the quantity and price, since we might want it later. Instead, select the columns you don’t want, and right-click their letter (A and C in this case). Then, select “Hide”. b2 Now the columns that we don’t want in our chart are hidden. We can always get them back later by going to “Format” -> “Visiblity” -> “Unhide Columns”. Now select your data and insert a “Bar Chart” instead of a “Line Chart”: b3 Before you’re finished, your chart will say “Total Cost”. You can change this by clicking on “Total Cost” and editing to say whatever you would like (like “Portfolio Allocation”). b4 This graph is now finished, but you can also try changing the Chart Type to try to get a Pie Chart.

Switching Chart Types

Sometimes, our first chart type is not the best way to display our data. For example, a bar chart will show me how much of each symbol I am holding. A better choice might be a pie chart, which will show how much each symbol is as a percentage of my total holdings. To change our bar chart to a pie chart, right click your graph and select “Change Chart Type”: b5 Next, find the “Pie” charts, and pick whichever chart you like the best. b6 Last, now we don’t know which piece of the pie represents which stock. To add this information, click your pie chart, then at the top of the page click “Design”. Then select any of the options to change how your pie chart looks. b7 Congratulations, you’ve converted your bar chart into a pie chart! This one should look almost the same as the one you have on the right side of your Open Positions page. You can now copy and paste these charts directly into your Word document, or save it as an image to use elsewhere.

Directions for Google Sheets

To create a Bar Graph, select “Insert” then “Chart”, the same as we did for our previous line charts. b9 When clicking this, one of the options in “Chart Editor”, will be “Chart Type”, their you can select the bar graph or pie chart. b10 In this section you will also need your Data Range, which will be the same as the previous example (Symbol and Total Cost). To edit the axis and other information, is the same method as the previous type. b11 The pie chart will look very similar to that on your Open Positions Page as well! b12

Pop Quiz

If watching this video was an Assignment, get all 3 of these questions right to get credit!

Click "Next Question" to start the quiz!

1 of 3) When calculating percent changes, how many rows of percentages will you end with?
2 of 3) What kind of graph is best for seeing your portfolio value over time?
3 of 3) Where can you change how a chart's colors and legend appears?

We have received your answers, click "Submit" below to get your score!



Using Spreadsheets – Calculating Profit or Loss From Trades

Using Spreadsheets – Calculating Profit or Loss From Trades
The most important reason you would want to use excel to track your stock portfolio is trying to calculate your profit and loss from each trade. To do this, open the spreadsheet with your transaction history. It should look something like this: profit 1 Tip: If you have not bought and then sold a stock, you can’t calculate how much profit you’ve made on the trade.

Simple Calculations

First, we want to change how the data is sorted so we can group all the trades of the same symbol together. Use the “Sort” tool to sort first by “Ticker”, next by “Date” (oldest to newest). trans calc 2 For DWTI and SPY, we haven’t ever “closed” our positions (selling a stock you bought, or covering a stock you short), so we cannot calculate a profit or loss. For now, hide those rows. trans calc 3 Now we’re ready to calculate! Lets start with the trade for S. This one is easy because the shares I sold equal the shares I bought. This means if we just add the “Total Amount”, it will tell us the exact profit or loss we made on the trade.
cost 3
This does not work for UWTI, because I sold a different number of shares than I bought. This means that I need to first calculate the total cost of the shares I sold, then I can use that to determine my profit.

Different Buy/Sell Calculations

First: multiply your purchase price times the number of shares you sold: trans calc 5 Second: add this number to the “Total Amount” from when you sold your shares. trans calc 6 Now you have your profit or loss for this trade. Note: this is the method for if you bought more shares than you sold – if you bought shares at different prices, then sell them later, you’ll need to calculate your Average Cost to use in your calculation.

Average Cost Calculations

To calculate this, lets use the same example of UWTI shares and delete the rows of the S shares. Suppose we bought 11,620 shares on January 12th, as we did above, but also bought 6000 shares on January 15th for a different price at $2.5 per share. To calculate our profit or loss we would first have to calculate the Average Cost of the shares we bought. To do this, we need to add our total amounts for both purchases and divide that value by the total number of shares we bought. The calculation for this would be (24402+15000)/ (11620+6000), which would give us a value of $2.24. We can easily create a function on Excel or Google Sheets to calculate this for us. In this case, our function would be “=(G2+G3)/(C2+C3)” which should look something like this on Excel or Google Sheets: calculating cost   Next, we subtract this Average Cost from the Average Sale price of $1.9 and multiply the value we get by the number of shares we sold. This will then give us our profit and loss for the trade. We will have to create another function for this onto cell G10. However, since our average cost value is already negative, we would add it on our function instead of subtracting. Our function should be “=(E4+G7) *-C4” which should give us a value of $-1681.04 (Loss). We also put a negative sign in front of our C4 value to represent a sale. Our final spreadsheet should look something like this: profit or loss

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3 of 3) How can you calculate the profit and loss per trade if you buy and sell different amounts at different times?

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Using Spreadsheets – Calculating Your Daily Returns

Using Spreadsheets – Calculating Your Daily Returns
If you’ve been trading for a long period of time you might have been curious to know what your daily returns were. Excel and Google Sheets can help you efficiently calculate this in a simple way. Suppose we started trading on August 29th, 2017. It is now September 7th and we would like to know our daily returns for our portfolio. First, we would look up our Historical portfolio values by clicking “Graph My Portfolio” under the “My Portfolio” tab in the navigation bar.   Once there, simply click on Historical Portfolio Values and a new window will pop up displaying the data. The page should look something like this: Next, you can highlight everything from “Date” to the last number under “Value”. Then, copy the data and paste it onto cell A1 in your blank spreadsheet. As mentioned in our Getting Some Data article, values may sometimes appear as “#####”. To fix this, you simply need to adjust the column widths. Next, we add a heading for Daily Returns under column “C”. We can then create a function on Excel or Google Sheets to calculate each days’ return for us in dollars. Since we only started trading on August 29th, we wouldn’t have any returns for that day and we can leave that cell blank. Instead, we would write the function onto the second cell under the column, cell C3, and drag it downwards from the bottom right of the cell to copy it onto the rest of the column. The function we would input is “=(B3-B2)”. It should look something like this on your Google spreadsheet or Excel: The values we have calculated here are our daily returns in dollar amounts. If we wish, we can also find these amounts as a percentage. To do this, we would create another heading on column D and name it “Daily Returns %”. Then, we would click on the second cell under this column (Cell D3) and input the function “=(C3/B2) *100”. This should give us a value of 0.009%. To repeat this for the other dates, simply drag the 0.009% value downwards the same way we did for the dollar value. Google Sheets/Excel will then calculate the remaining values for us.  We have now calculated our daily returns in a dollar amount and as a percentage. The final spreadsheet should look something like this:

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3 of 3) Which of the following is the formula for the daily return % ?

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Using Spreadsheets – Importing and Formatting Data

Using Spreadsheets – Importing and Formatting Data
The first step in using any spreadsheet is getting some data! This tutorial will show you different ways to import some of your portfolio data into a spreadsheet and how to format it to make it easier to read.  

Getting Data

The first step to using any spreadsheet is getting some data – once we have our data in our sheet, we will then start formatting it to make it easier to use.

Copy/Paste Method

The easiest way to import data is to just copy and paste it from a website or another source.

Getting Your Historical Portfolio Values

To get your old portfolio values, you can copy and paste them out of the HTMW website. First, you will need to get your historical portfolio values from the HTMW website. You can find these on the “Graph My Portfolio” page. get data button This will open up a small window showing what your portfolio value was for every day of the contest. Highlight the information you want, then right click and “Copy”. portfolio value Next, open a new blank spreadsheet and click cell A1. You can then right-click and “Paste” the data in. The column headings should be included too.
Adding Column Headings
If the column headings are not included, right-click the first row and select “Insert Row”. This will add a new row to the top of the spreadsheet where you can type in the column names. Google sheets gives you the option to add a row above or below the one you right clicked. column headings Now “Save” your file somewhere you can easily find it later, you’ve got some data!

Getting Historical Prices for Stocks

For this example, we want to get the historical prices for a stock, so we can look at how the price has been moving over time. First, create a new blank spreadsheet in Excel or Google Sheets. We will use Sprint stock (symbol: S). Go to the quotes page and search for S, then click “Price History” on the right side of the page: s history   Next, change the “Start” and “End” dates to the time you want to look at. For this example, we will use the same dates that we saved for our portfolio values, January 11 through January 15, 2016. Once you load the historical prices, highlight everything from “Date” to the last number under “Adj. Close” (it should look like this): price highlight Now copy the data, select cell A1 in your blank spreadsheet, and paste. Congratulations, we have now imported some data into our spreadsheet! You can now save it for future use. The data is a bit messy; we will look at formatting later.

Export Method

Sometimes, websites will make it easy for you to export data directly to your spreadsheet without copy/paste. If an export option is available, this is going to work better, since it will require less formatting later. If we look back at the Historical Prices, you can see that there is also a “Download” button at the top of the table:   download button   This will download a spreadsheet you can just open directly – you can also see the data is already easier to read and better formatted, which will save us time later.   price export  

Copying Between Spreadsheets

You can also export your portfolio data from the My Contests page – this will download one big spreadsheet showing your account balances, trades, open positions, and more: portfolio export   Once you download the spreadsheet, you can open it to see the available data: port export 2   The top red square is your transaction history, the bottom red square is your Open Positions. To use this data, you will need to open a new blank spreadsheet and copy these boxes (just like we did above) from one spreadsheet to another. Start by taking your “Transaction History”, copying the data, and pasting it into a new spreadsheet. trans history   To start using this data, we will need to look at formatting to make it easier to read.

Formatting Your Data

Now that we have a few saved spreadsheets, we can look at formatting the data to make it easy to read and use later.

Changing Data Order

If we look at the spreadsheets we have saved for our Historical Portfolio Values, it is the exact opposite of what we have for our Historical Prices. To get them in the same order, we will want to open up our Historical Prices spreadsheet, and order the data from “Oldest” to “Newest”. We will use the “Sort” function with Excel, or the “Data” function for Google Sheets. sort excel   sort sheets We can now choose what we want to sort by, and how to sort it. If you click the drop-down menu under “Sort By”, excel lists all the column headings it detects (select “Date “). Next, under “Order”, we want “Oldest to Newest “: sort 3 Now your data should be in the same order as your portfolio values from earlier.

Changing Column Width

Next, you’ll notice that some of your data appears just as “########”. This is not because there is an error, the number is just too big to fit in the width of our cell. To fix this, we can increase and decrease the widths of our cells by dragging the boundaries between the rows and columns: column width Tip: if you double click these borders, the cell to the left will automatically adjust its width to fit the data in it. If you want to automatically adjust all your cells at once, at the top menu click “Format”, and “Auto Fit Column Width”:   Once you’ve adjusted your volume column, everything should be visible!

Removing Columns

If we want to use this data for making a graph, we will not need all of the data in the sheet. We really only need the “Date” and “Closing Price”. To keep it easy to read, we will delete some of the extra data. If you just highlight the data you don’t need and press “Delete”, you will end up with a bunch of blank cells, which is not very useful when trying to read the table: Instead, click on “B” and drag all the way to “H” to select the full columns: select columns Now right-click and click “Delete”, and the entire rows will disappear. Now the Close will be your new column B, with no more empty space. You now have your historical price data, so save this excel file so you can use it later.

Unmerging Cells

Now let’s go back to our Transaction History spreadsheet. With this sheet, we cannot do many of the basic operations because there are some “Merged Cells”. Merged Cells can be used for formatting and presentation, but for now it is just getting in our way. This is the case with the Ticker, Commission, and Total Amount cells. We need to “unmerge” these cells to make our data usable. trans history To do this, select all your data, then on the main menu bar click on “Merge and Center “. Under this, click “Unmerge Cells”. On Google Sheets, this can be done by clicking on the “Format” tab in the navigation bar and then clicking on “Text Wrapping” and then “Clip”. unmerge cells

Putting It All Together

Now that we have our data all in their own cells, we can start deleting the rows and columns we don’t need. For example, rows 2 and 3 have our beginning cash, which we don’t need in our transaction history. Columns E and H are now blank, so we can get rid of those too. Once you delete the rows and columns you don’t need, you can also autofit the row width to make the “date” visible. trans formatted

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5 Tips for Your Spring Stock Game

5 Tips for Your Spring Stock Game
  If you are using the HTMW stock game for the first time, or if you’re a veteran looking for some tips, here are the Top 5 Best Practices for your late Spring stock game!

Why More Teachers Start Their Games In The Spring

The school year is entering its final stretch, and your students know it! As the snow melts away and flowers start coming out, your students’ eyes have probably been lingering out the window (or on the clock) – making this an exceptionally difficult time to keep them engaged. This is why the Spring is the most popular time to run a classroom stock game! We at HTMW always find that longer stock games work better (and teachers agree: semester-long and year-long classroom stock games are on the rise!), but we always see a huge surge of new classes created in the second half of the Spring semester. Even if teaching about investing and the stock market is not at the top of your class agenda, mixing up the volatility of the markets, researching real companies and the economy, and good, old-fashioned class competition makes the perfect recipe for engaged students, and a Spring full of learning!

#5: Use Assignments

On HTMW, an Assignment is a list of task you can give your students to complete. This is what makes our stock game unique – Assignments reinforce the learning process while making the game easier to pick up and master. Assignments include:
  • Watching tutorial videos, showing the students what it means to manage a portfolio and make their first trades
  • Reading educational articles, like “What is the NYSE?” or “How to use a Spending Plan”
  • Taking automatically-graded pop quizzes, embedded with each article
  • Making trades to start building their portfolio
Once you already have a spring stock game set up, it takes less than a minute to add an awesome Assignment that your students will love. If you haven’t used assignments before, click here to see how!  

#4: Be Sneaky With Learning!

Students have been in school since last September, and you probably have some students that already seem tired of lectures and projects, but this is their time to shine! There is so much happening in the world that impacts the stock market, which is why the stock game is such a versatile tool for learning. On HTMW, we have a special tool called “Trade Notes”. This means that you can require your students to make a short, 1-2 sentence note with every trade as they are building their portfolio. This is a great way to reinforce class concepts, without your students even realizing they are learning! Kick off your class by talking about a current event in the news, and how it relates to your class topics. This works just as well for History classes as it does Personal Finance – but it plants the seed for your students as they start to trade. Next, ask students to make at least 1 trade each day relating to that topic – and write a brief note about how it affected their decision.

#3: Let Your Game Run Long

Your class might end in a month, but your stock game doesn’t have to! In fact, HTMW has a built-in “Forums” feature, where students can post messages for other students to see and reply to. You can use the Assignments feature to even set up a Summer activity for students, and use the Forum to let them continue discussing the markets even after classes end!

#4: Give Prizes

  A little incentive can go a long way! If you want your students to remember what they learned in the stock game long after it ended, it can be as simple as handing out certificates to the winners or participants. We even have a handy template you can use! Click here to download a winner’s certificate! Alternatively, Click Here to download a participation certificate for everyone in your class!  

#5: Start Now

This might sound obvious, but your students can’t benefit from the HowTheMarketWorks Stock Game if you haven’t set up your class! There is a reason why we were voted the #1 stock game – we make it easy! So if you haven’t already, take 2 minutes to set up your absolutely FREE spring stock game! Click here to register your class  

How To Build A Portfolio

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What is a Stock Index?

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What is a Stock Exchange?

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What are Mutual Funds?

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Stocks Made Easy

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Teacher Referral Program

Teacher Referral Program
We owe our success to teachers like you using HTMW and referring us to your friends. As our way of saying “Thank You”, we want to give all teachers who refer a friend who creates their own class contest with an Amazon Gift Card.

Program Details

Come-To-The-CommunityParticipating is simple – just ask your friend or colleague to create a class on HTMW with at least 15 students who place at least 5 trades before December 20, 2017. Send us the name, school, and email address of your colleague to info (at) howthemarketworks.com so we can watch out for their class, and make sure you get the referral credit. We will send both you and your colleague a $25 gift card for every new teacher you refer – use it for a classroom pizza party, cool gifts for your top class traders, or anything you want!