Investopedia Simulation

Topics: Stock market, Stock, Investment Pages: 5 (1349 words) Published: April 1, 2014

Comm 200
Investopedia Simulation Assignment

Executive Summary

The purpose of this report is to illustrate my experience of participating in the Investopedia simulation. It will outline my initial strategies as well as changes in my investment methods as the simulation progressed. Essentially, the report will capture my assessment of the knowledge gained from my experience with investing in stocks.

The report includes my background with regards to the stock market and past experiences in related fields. In addition, it illustrates my initial purchases and strategies in investing as well as how these strategies progressed as the simulation went on. Furthermore, the report outlines what external sources I used to help enhance my knowledge and investment abilities and overall, what I learned from this entire process.

The majority of my research was done through online sources to analyze trends in the market in order to decide which stocks to buy and which ones to sell.

In the end, I found that the stock market is a dangerous place. Investing in companies takes mountains of research in order to decide which one is worth your money. It is essential to know the ins and outs of a company before putting your money in harm’s way. Otherwise, it is essentially gambling your money at a casino.

Report

Before the launch of the Investopedia simulation, I had no prior experience or exposure to the stock market. I did not have the chance in secondary school to enroll in an introductory business course and have not had the opportunity to manage a portfolio prior to Comm 200. However, following day to day news, I have encountered the majority of the terminology presented in the market sector as well as the existence of stock exchanges. However, I would not go as far as referring to myself as ‘investment savvy’.

Knowing this, the simulation started and the initial purchases needed to be made. From appendix 1 and 2, the initial purchases can be seen at the bottom of each list respectively. In the US market, it can be seen that the majority of my cash was used to purchase stocks in:

50 shares in Athena Health, Inc. (NASDAQ:ATHN)
300 shares in Activision Blizzard, Inc. (NASDAQ:ATVI)
400 shares in Skyworks Solutions, Inc. (NASDAQ:SWKS)
100 shares in Gilead Sciences, Inc. (NASDAQ:GILD)

The initial strategy was to invest mainly in goods that were essential for everyday use. Skyworks Solutions develop and distribute semiconductors for radio towers which are pivotal in our ever growing technological world. This shift towards technology also facilitated the increase in popularity of video games. As a result, 300 shares were purchase of Blizzard stocks, one of the leading developers in the gaming industry. Moreover, 150 shares were purchased between Gilead and Athena Health, both of which are pharmaceutical companies. With the development of sicknesses worldwide, individuals are seeking newer prescriptions to treat illnesses they are afraid of receiving. Individuals are willing to pay top dollar for drugs if it means protecting their health. As a result, pharmaceutical companies are emerging at an exponential rate, and those at the forefront of development are making an enormous sum of money.

On the other hand, the Canadian market saw initial purchases of:

50 shares in Domtar Corp (TSX:UFS.TO)
400 shares in Canadian Oil Sands Ltd (TSX:COS.TO)
50 shares in Canadian Tire Corp Ltd (TSX:CTC.A.TO)
1000 shares in Aurora Oil & Gas Ltd (TSX:AEF.TO)

Similar to the US market, the initial purchases reflected the same strategy of purchasing stocks in commodities that were essential in everyday use. Canadian Oil Sands as well as Aurora Oil & Gas were invested in to capture the large sum of money that oil provides. Being a relatively inelastic good, companies as well as individuals are relatively indifferent to price changes as oil is a necessity in almost every aspect of life. Domtar Corp...
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