Introduction

Welcome to the world of investments! Your McGraw-Hill textbook purchase, Understanding Business 9/e by Nickels, McHugh, and McHugh gives you the opportunity to participate in the McGraw-Hill/Stock-Trak Wall Street Survivor simulation for FREE. The simulation can be accessed by first creating an account at http://www.wallstreetsurvivor.com/Public/Members/McGraw.aspx?p=MGH_InvestmentTrader_Business. You will be competing against your classmates and against all the students from across the country in Introduction to Business who is registered for that period.

Once you register at the above site, you will receive a password and you will have a brokerage account with $100,000 in fictitious money. You will use these funds to trade stocks and mutual funds for the period of time specified by your instructor. Your instructor will provide you with the details regarding the trading dates and other requirements.

Before you begin trading and after you have logged in to the Wall Street Survivor site, you should review the various tutorials and information provided under the menu header “Learn Trading.” You will find a dropdown menu that provides tools and other resources that will help familiarize you with stock trading and other important aspects of the simulation. You should pay particular attention to the “Beginner Tips” and the “Intermediate Tips.” Once you are on the homepage, you will see nine additional main tabs: My portfolios, Trade, Research Tools, Learn Trading, News, Games, Community, Prizes, and Store.

My Portfolios

The first menu option is “Dashboard” shown below. This will provide you with the current status of your portfolio, information on other traders, the leaders across the country in the simulation, and information for the latest StockTwits that you are able to access. When you first access your Dashboard, you will see that you have $100,000 in Portfolio value and $200,000 in buying power.

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Research

Before you make your first trade, you should determine your investment goals and objectives. Your instructor will provide you with details regarding your assignments that may include a daily journal and a final performance report. In order to make intelligent investment decisions, you need to do your homework. That is, research the companies, the funds, the stock performance, the industry, and analysts’ opinions or evaluations of a particular company that you may be interested in. The Research Tools main tab is where you will find stock quotes, experts’ rankings, and even the top stock picks from analysts. You should take some time to familiarize yourself with these tools. You will be required to demonstrate the research that you have done prior to making your trades. Below, you will see the screenshot for the stock quotes option under Research Tools.

The Stock Screener option is shown also. Here you can specify the criteria you select in order to help you make your investment decisions.

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Trade Tab

The Trade tab provides a dropdown menu where you will actually make your investment trades. This is where the “action” will take place. The Trade Stocks area is where you will enter the stock symbol, the quantity of stocks you wish to trade (Buy, Sell, Short, or Cover) and the order type (Market, Limit, or Stop). Below is a short description of your choices.

BuyBuying means you are buying a stock expecting it to move higher in price.

SellSelling a stock means you want to close (liquidate) the long position you hold.

Sell Shortselling a stock short means you are borrowing the stock from the broker and selling it at market expecting it to go lower. If it goes lower in price, you are making a profit, whereas, if it goes up in price while you have it short, you are losing money in that transaction. Using the Learn Trading tab will help you better understand all of these options.

Cover shortWhen you have sold a stock short, you can buy that stock at a later date to repay the broker. While you held the stock, if the price of your short position has gone down, you are making money. If it has gone up, you have a loss.

A WORD OF CAUTION: Although you can sell a stock short, and over the short position, it is highly advisable to focus on buying and selling stocks and avoiding the short selling of the stocks. Given the complexities involved in the stock market, this is a simple tip as you are learning. Again, use the Learning Trading tab to help you find information on these and other trading topics.

The stock price of the company that you choose must be $5.00 or higher in value. You should have the stock ticker symbol for your company to be able to buy or sell stock, For example, software giant Microsoft trades under the ticker symbol MSFT and Coca-cola trades under the ticker symbol KO. You can search for the stock ticker symbol by entering the company name under the Trade tab dropdown menu option of Symbol Lookup.

Every time you buy or sell a stock, you will be charged a commission. You can trade any stock listed on the following stock exchanges: NYSE, NASDAQ, and AMEX.

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My Order History

To check on your orders, to see what is pending, and find a complete summary of the stocks you have traded with the order price and the trade price, click on the My Order History menu option on the dropdown menu from the Trade tab.

My Account Balances

You can access your account balances by selecting Account Balances under the Trade tab. As you can see from the screenshot below, this screen provides your cash balance, market value of long and short stocks, and your buying power (or what you have available to trade stocks with).

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My Rankings

This page shows your Stock-Trak ranking including the portfolio value. You can view your rankings on a weekly, monthly, or lifetime basis.

By clicking the “My Group” tab, you can access a list of the top portfolio managers and their values that you are competing with. Since you are playing against students around the country, keep in mind that every course may have a different trading period (i.e. some students may be trading for 10 weeks, others only for 2 weeks). If you would like to look at your ranking within your own course, you will need to print out the entire ranking list, and highlight the individuals in your class only.

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Market News

As you follow your portfolio and those of your competitors, you should review market performance on a regular basis. The News tab provides several different types of news that you can use for your research. Below is the Markets Summary screenshot showing the market performance on a daily basis for all three of the major exchanges: NASDAQ, NYSE, and AMEX.

Bloomberg TV

Another feature of the News tab is Bloomberg Television. Here, you can access the most recent financial news from Bloomberg. This can provide additional research information to help guide your investment decisions.

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Glossary

Trading can be exciting and interesting. However, there will be terms that you encounter that you may not be familiar with. Wall Street Survivor Game provides an excellent glossary to help you understand terms that may not be familiar to you. You can access the Glossary under the News tab on the main page.

We hope you enjoy learning about the stock market and trading through this simulation, develop disciplined research and trading habits, and have FUN while you learn!

Experiential Exercise: Comparative Industry and Investment Analysis

Access the McGraw-Hill Stock-Trak Wall Street Survivor Simulation page. Click on the Research Tools tab and access the dropdown item “Stock Quotes.” Once there, you can navigate the page and do research on the company of your choice. You can view the symbol quote, take a look at the advanced charts, and see the various tock ratings and the year to date performance. You can also access the Stock Talk tab or the Stock Summary Tab. The Stock Summary tab provides very useful information on the company, the industry and related issues (see below).

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Your task is to identify two top industries of your choice and three top competitors in each of these industries. You should select the industries and the companies within the industries based on research you do and your assessment that the companies within the industries should be top investments. Before committing to the industries and the companies within these industries, develop a one-page rationale for your choice of each industry and about a half-page rationale on one company from each industry as to why you would want to invest in them. The other tow companies in each industry should be the key competitors of your chosen company for investment.

Keep in mind the five criteria when selecting investment options to achieve your objectives:

1. Investment risk

2. Yield

3. Duration

4. Liquidity10

5. Tax consequences

Throughout the course of the semester, monitor the performance of these companies by using the Stock Trak Wall Street Survivor site and the various research and market tools available to you. If there is any movement of more than one dollar or 5 percent in the stock’s price of these six companies you should:

Make a note in your journal

Identify the reason for the price movement

o The overall market was up

o Company introduced a new product or analyst upgrade

Keep a daily record of the closing prices of the six companies, two industries, and S&P 500 Index

Develop separate charts for each industry including its three companies and S&P 500 Index.

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