Economics 104
Stock Portfolio Assignment
Part 2 .. choosing
your own portfolio
This assigment
must be done on the evening of Friday September 16 or on Saturday or
Sunday, September 17 or 18, and is due in
class on Tuesday, September 20. See why in the instructions.
[again, you will told when to do this in class .. print and read this entire
assignment carefully before attempting to complete it]
- You have been given $100,000
to invest. You may invest in stocks that are found on the NYSE Euronext, the American Stock Exchange, and/or the
NASDAQ National Market and Small Cap Market. You may not choose stocks
listed on the OTCBB market (if you don’t know what this is,
don’t worry about it).
We are also excluding foreign stocks and mutual funds of all kinds.
You will be allowed to choose one ETF (if you know what that is),
including a global ETF, if you want. There is one additional restriction -
the stocks chosen must be quoted by the Yahoo quote site, which will
eliminate some small cap stocks.
- You must choose a minimum of
four stocks and a maximum of six. No holding can be worth less than
$15,000. One and only one selection can be an ETF. The remainder must be
ordinary stocks. Each stock that you choose must be from a different
industry. Likewise only two stocks can be from the same sector. For
example, you may choose two stocks from the TECHNOLOGY sector if one is
DATA STORAGE DEVICES and the other is APPLICATION SOFTWARE.
- This step is very
important!: You cannot do this assignment during a weekday while
stocks are being traded. This assignment must be done on a Saturday
or Sunday or Friday night when the markets are closed on the weekend that
your are assigned to do this. Therefore, this semester the assignment
must be done or the evening of Friday, September 16, or on
Saturday or Sunday, September 17 or 18. All
students in the class must start this portfolio on the same weekend.
Likewise, you really can't start it, then return to it later. It should be
done in one sitting. It is likely to take about an hour.
- Build a new, separate
portfolio on the finance.yahoo.com
site. Do not combine this portfolio with the portfolio constructed
to comply with part 1. First build your portfolio off-line, using
Yahoo to find symbols and prices. Find the symbols of the stocks you have
chosen, also looking up the current price for the prior day's close for
each stock, being very careful to record the exact closing price,
including decimals. Then construct your portfolio off-line,
including how many shares you are going to purchase of each (the total
should come out slightly less than $100,000) before trying to build this
portfolio in yahoo. Basically, spend $100,000 to buy four to six stocks.
- Now build a new portfolio in
yahoo, this time instead of using the Track Your Symbol Watch List that
you used in part 1, use Track Your Current Holdings option
(as though you had actually purchased these stocks), giving it a name and
providing your stock symbols. When you get to step 3 Basic Features,
select the default Performance option.
- When you get to step 4, Advanced
Features, select (put a check next to) Shares Owned,
Purchase Price/Share and Trade Date. Do not select
other features, such as commission (we are going to ignore commission,
which would be nominal given the large size of our portfolio). Continue to
the next page.
- This will introduce you to
step 5, where you enter, for each stock in your portfolio, the number of
shares purchased, the price and the trade date, which must be the
actual date that you are completing this assignment. Enter no other information,
such as commissions (we are ignoring commissions, which would be nominal
in a portfolio this large anyway). Now select Finished. Your
new portfolio should appear.
- If you have done everything
right, this page will show that the value of your portfolio totals equal
to or slightly less than $100,000, and that the Gain columns
show $0.00 in the left column and N/A in the right column for each stock
shown. This is because you have done this assignment on the weekend or at
night after the market close, have used the closing price, and have used
the correct date.
- Print out your portfolio Performance
sheet. Do this right away because tomorrow the page
will not look like this! On the date specified in class or in the
instruction set for this homework, submit it to the instructor. Once you
do that, you are "entered."
- You may not alter this
portfolio throughout the semester. You are stuck with the decision made
for step one (which makes this a little unrealistic). You may neither add
nor remove stocks, nor may you change proportions. Basically, the ending
portfolio must look just like the portfolio printed in step 7. Only the
portfolio value will be different.
- You are expected to
frequently monitor this portfolio throughout the semester. I will,
however, collect nothing additional from you unless you wish to undertake
optional step 12.
- [Optional]: On the day near
the end of the class that the instructor specifies, you may again print
out your portfolio Performance sheet with its new calculated
value and submit it to the instructor for comparison to all others
submitted. If you are among the top performers as measured by the rate of
increase in the portfolio's value, then you will be rewarded according to
the following schedule: (a) top two: extra credit worth 5% of final score,
(b) next five: 3% of final score, (c) next five: 2% of final score. There
is no penalty for failing to submit your final portfolio, nor any penalty
for failing to be in the top 12. (Note: There is a
penalty for failing to set up this portfolio as described in step 7).
These extra credit scores will be added after the grading
distribution has been calculated for the class. Therefore, the extra
credit might only improve your grade, and the failure to submit your final
portfolio can't possibly hurt your score.
Return to Course Assignment
page.