Question

Imagine you have $1,000 to invest. Choose what companies you want to invest in. Use the search box to type in the company name to add it to your Watch List.

Looks at the current stock prices (i.e. Apple listed at $166.07). If you buy one share, that’s what it would cost you. Spend your $1,000 as you choose on any stocks you would like.

Take note of each stock you buy, the price and how many shares. The total should not exceed $1,000. But, you also do not have to spend all $1,000.

Example: You decide to buy 6 shares of Apple listed at $166.07 per share that day. With your $1,000 budget, the total you can buy is 6 shares x $166.07 = $996.42. After two weeks Apple is listed at $156.15 per share. Your 6 shares are now worth 6 x $156.15 = $936.90. You then take your initial $996.42 - $936.90 = $59.52. Because it went down, you lost $59.52.

Check your stocks each day and keep track of the increases and decreases for 2 weeks. At the end of the 2 weeks, write a reflection on the following:

1. What stocks did you invest in, and for how much?
2. Why did you choose these companies?
3. What were your end results? Did you make or lose money? How much?
4. What takeaways do you have from this investment experience?

Answer 1

The stocks I invested in are Netflix and Walmart. The price of Netflix on 2nd July is $374.57. The price of Walmart on 2nd July is $111.50. The number of shares of Netflix bought is 2. The number of shares of Walmart bought is 2. The amount invested is ($374.57 * 2) + ($111.50 * 2) = $972.14

I chose these companies because :

• Netflix is due to report its earnings on 17th July. I am expecting that the price of Netflix will increase over these two weeks in anticipation of good earnings.
• Walmart stock has been performing better than the broader market. I expect that Walmart's acquisitions and digitization strategy will pay off and the stock will do well.

At the end of two weeks, Netflix stock is trading at $365.99, and Walmart stock is trading at $114.76. Value of stocks at end of 2 weeks = ($365.99 * 2) + ($114.76) = $961.50.   I made a loss. Loss = $961.50 - $972.14 = $10.64

My takeaway is that stock prices may not change in the way you expect them to. Each stock has many different forces acting on it, and predicting stock prices is very difficult and complex