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N . S h e f l i n THE INVESTMENT GAME – GETTING STARTED Congratulations, you have an imaginary $100,000 and a real 13 weeks to learn about investments and make (or lose) a fortune. You will invest in financial assets so as to maximize your gain, assuming liquidation by the end of the semester. While you may eventually choose to buy a mix of stocks, mutual funds, money market instruments, we will start with stock only. In subsequent assignments, we will talk about bonds, mutual funds, etc. We will be using an on-line simulation that has some minor flaws, but is free. There will be homework and quiz questions drawn from the game which will count in your grade. PRIZES for the best performing portfolio -- $10 and for the worst portfolio, $5 (real, not imaginary) . Some Hints: This is short-run investing with no penalty for bad results, so unlike the real world, feel free to take risks Many/most economists believe that one cannot consistently outperform the stock market - that is, financial markets are efficient. They therefore recommend no-load, index stock mutual funds. You won’t win this game using these, but you will do very well in the real- world. Look at the CNN, WSJ, Times, Barons, etc. for “tips” and analyses on “hot” stocks. Of course, these generally don’t work If you know a bit about an industry, a company, etc., by all means, look into it Leverage - options, margin, futures contracts, selling short - we’ll look at all of them NO: buying/selling other than 9:30-4:00pm Mon-Friday (when markets are open).
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This note was uploaded on 01/29/2012 for the course 220 103 taught by Professor Sheflin during the Fall '09 term at Rutgers.

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