Course: Investing and the Stock Market

Transcription

1 Course: Investing and the Stock Market Created by: Amulya Kattimani Anmol Mittal Keerthan Harish Vishva Mehta Alisha Devji John P. Stevens High School Inside you will find the one-ofa-kind lesson plan to teach students all over the nation about Investing and the Stock Market. Edison New Jersey

2 Acknowledgement The John P. Stevens High School s FBLA chapter from Edison, New Jersey, had a tremendous year by involving its members in the We Seed Virtual Stock Market. Our members experienced buying and selling stocks while learning about the stock market without the risk of losing real money. Everyone we spoke to, had a lot of fun participating in the We Seed.. Along with experimenting and strategizing with WeSeed s virtual stock, our members had the opportunity to gain knowledge and experience through different activities we employed, such as playing Jeopardy games, taking short quizzes, doing group projects, having open discussions, listening to guest speakers and much more. We, the WeSeed Stock Market team of John P. Stevens High School, would like to thank our dedicated members and local advisor, Laura Ribinsky for allowing us to implement our ideas. We thank Stephen Parkoff, our guest speaker, for inspiring us to carry on our project, and providing his guidance and support. And most importantly, we thank WeSeed and its creators for providing us a wonderful resource. Below is the one-of-a-kind lesson plan you are looking for that will change the way classrooms all over the nation learn about Investing and the Stock Market. We have incorporated a variety of activities and teaching methods to keep the students most engaged, most entertained and most benefitted. We are confident that this unique and creative lesson plan will revolutionize the myths of Investing and Stock Market and make all of us better investors and better share holders. Sincerely, The WeSeed Stock Market Team of John P. Stevens High School 2 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

3 Overview Contents I. Introduction II. Lesson Plans 1. Week One: Let s begin! Day One: Ice Breaker and Jeopardy Game Day Two: Money, Companies and Banks Day Three: What is the Stock Market? Day Four: Discuss the stock trends of familiar companies Day Five: What is the NASDAQ? 2. Week Two: Get to know your terms Day Six: Share Prices - How are they influenced? Day Seven: Fundamental Terms Day Eight: Fundamental Terms Continued Day Nine: Jeopardy and Short Quiz Day Ten: Sign up for a WeSeed account and start building your portfolio 3. Week Three: Become a stockholder! Day Eleven: Class Discussion How to judge stocks? Day Twelve: Governmental role in the stock market Day Thirteen: Value Investing and Growth Investing Day Fourteen: Project Company Trends Day Fifteen: Jeopardy and Short Quiz 4. Week Four: Become a smart investor! Day Sixteen: Influential Investors - Warren Buffet, Stock Market History Day Seventeen: Project Presentations Day Eighteen: WeSeed Challenge ends Declare Winner, Discuss Patterns Day Nineteen: Career Opportunities Investment Banker Day Twenty: Class Feedback and Farewell Party III. Conclusion 3 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

4 Introduction Day One Introduction Investing and the Stock Market is a four-week course that meets for approximately forty to fifty minutes in each session, for a total of twenty sessions. The sole purpose of this course is to acquaint novice learners about the stock market and how it works, and to give them a hands-on experience in investing and stock trading. Along with training beginners, this course will provide an opportunity to trade with fake stocks that have real values. The following lesson plan may be adapted to fit your individual requirements. 4 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

5 Day One Ice Breaker and Jeopardy Game Introduce the course and explain goals to be achieved by the end of the course Excite class about the course Introduce class members to each other Initiate using the stock market language II. Process: The teacher should introduce himself/herself and start out with asking basic questions that students might have about Investing and the Stock Market. The questions could be as such: What are the first few words that come to your mind when we talk about Investing and the Stock Market? Do any of you have family or friends that made fortunes by trading stocks?... Do any of you know those that lost huge sums of money? Do any of you own stocks? Or do you want to in the future? After students have contributed some responses, the main purpose and goal of this course should be explained. Students should be assured that they will have a better knowledge about the Stock Market, and become smarter investors by the end of this course. After this introduction, a short Ice Breaker game may be played to introduce class mates to each other. Finally, the class should be divided into two and a short Jeopardy game should be held. This game should contain the basic concepts about Investing and the Stock Market. This activity will not only introduce topics and concepts into students minds, but also bring a fun and enjoyable learning environment, and allow students to get to know each other. A sample game is attached. Students should be asked to read and print one interesting article about Investing and the Stock Market. 5 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

6 Money, Companies, and Banks I. Objective: Explain the fundamental concepts of money, companies and banks using examples. Talk about the history of money. Explain how companies and banks came into existence. II. Process: Ask questions to students in order to initiate discussion or assign the following questions as a Do Now assignment. a. What is money? What happened before money was around? What does money represent? b. What is a company? What is the difference between private and public limited companies? c. What is the function of a bank? Why do we need banks? Why do we keep our money in banks? How do banks make money? Define and explain fundamental concepts. Give background information on their history. A PowerPoint slide show may be included to outline each concept and provide notes. Talk about how trading occurred when bills and coins did not exist. o Ex. Trading 10,000 apples for 5 pigs. Explain the difference between private and public limited companies. Explain why it is not only safe to keep our money in the bank, but it is also profitable. Explain how banks make money by providing loans and charging interest. Make sure all Do Now questions are addressed and any further questions are discussed. Some Fun Facts may be read out loud to the class to interest students. Some examples include: The first ever public company was the Dutch East India Company during As usually assumed, money is not made out of paper; it is three-fourths cotton and one-fourths linen. Therefore, it does not tear easily. Day Two Find examples of two private companies and two public companies. Research why we have different currencies and why foreign exchange rates fluctuate. 6 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

7 What is the Stock Market? Explain the concept of Stock Market and Investing using simple examples. Discuss a few case studies where small companies have grown big with their investors. I. Process: Explain and provide notes on the following items: What is a stock? Why should you buy a stock? Why does a company issue stock? What is the stock market? What is a stock index? What are some big stock indexes? Day Three Discuss about the major stocks index companies. Dow Jones Industrial Average S&P 500 NASDAQ Composite Talk about small companies that have grown big because of their investors, because they issued stocks. Reliance Infosys Read out loud a few fun facts such as the one below: The stock market was initiated in the year 1792, when 24 stockbrokers and merchants signed the Buttonwood Agreement. Find the top 10 companies in the current Dow Jones Index List 5 of your favorite companies on the stock market. 7 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

8 Discuss the stock trends of familiar companies Understand the stock trends of familiar companies and analyze why they are so. II. Process: Day Four Pick three famous companies and analyze their stock trends since the last twenty years. Examples: Apple Inc. Infosys Google Find their stocks graphs from different sources such as CNN Money, Google Finance, Yahoo Finance and Daily Finance. Read sample Analysts reports and analyze what their predictions are based on. Pick one company of your choice and analyze their history and stock trends. 8 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

9 Day Five What is the NASDAQ? NASDAQ, named from its original National Association of Securities Dealers Automated Quotations is the world s largest stock exchange with more than 3,700 companies enlisted in it. Explain to the students what NASDAQ does and how critical a role it plays in the world. II. Process: If possible, invite a NASDAQ employee or ex-employee as a guest speaker and ask him to explain a how a typical day at the NASDAQ is. Encourage students to ask the speaker any questions they might have and create a forum for an open discussion. If having the guest speaker is not possible, an introductory video clip of the NASDAQ should be watched. We used this video that we found on YouTube. Students should be explained what happens at the NASDAQ and how they produce their data. If there was an opportunity to have a guest speaker, share that experience with your friends and family. Watch other YouTube videos on the stock market and Wall Street. 9 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

10 Day Six Share Prices - How are they influenced? Understand why stock and share prices fluctuate. What are the different factors that affect the share prices? II. Process: Assign the following Do Now assignment and initiate an open discussion. What latest current event articles have you read about any multinational company? Explain that the three major influences on stocks are Economic Fundamentals Changes in Sectors Market Swings Explain how daily news is so reflective on share prices. Example: The coal mine disaster in West Virginia caused company Massey Energy to fall 10% in one day of trading. Discuss that the earnings report, which is produced four times a year, is very influential to a company s stock prices. Look for one news article in the past one week that comments about a company s stock price. Mention that The Wall Street Journal is a very good source. 10 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

11 Day Seven Fundamental Terms Define and explain the fundamental terminology used in the world of Investing and the Stock Market. II. Process: Assign the following Do Now question and continue with open discussion. How would you decide if a stock is undervalued or overvalued? Describe what a Value Line Report is and hand a sample copy to every student. Explain the different parts of a Value Line Report. Explain what Fair Price Rating is and what the P/E ratio stands for. Review different P/E ratios and compare. Explain what a dividend is and why it is helpful to pay dividends. Make sure students jot down notes on all of these terms as there will be a quiz soon. Students should be taught how to read and understand stock values from The Wall Street Journal. Students should review what was taught in class and come prepared with any questions or doubts to ask in the next day s class. 11 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

12 Fundamental Terms Continued Further define and explain the fundamental terminology used in the world of Investing and the Stock Market. II. Process: Relate the concept of Balance Sheets to School Report Cards. Day Eight Report cards show progress of an individual throughout the year, companies issue Balance Sheets to show how a company is doing for the year. They show how much debt the company owes, what liabilities they have and how much money the company has on hand. Explain what Income Statements and Cash Flow Statements using examples. Show samples of Balance sheets, Income Statements and Cash Flow Statements to the students. Students should review everything discussed until now and be prepared to play a Jeopardy game followed by a short quiz tomorrow. 12 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

13 Jeopardy and Short Quiz After reviewing the main concepts, play a Jeopardy game so that students can learn and have fun. After a ten minute break, hold a short written quiz. II. Process: Conduct an entertaining and useful Jeopardy game. Students should take a short quiz after the Jeopardy. Day Nine Have fun after scoring very well on the quiz and, and be proud that you are on your way in becoming a very knowledgeable person on Investing and the Stock Market. 13 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

14 Sign up for a We Seed account and start building your portfolio Discuss and introduce the website WeSeed. Use a t a computer and a projector to display the We Seed website and give a quick demonstration of the site. Explain how to keep a Daily Log. II. Process: Spend a few minutes to discuss the idea of a virtual stock market and go over minor details that may include: Real Stocks Fake Money Real Prices 15 minute Delay Project a computer screen to show how to make an account. Show different companies (Ask students for examples) and show them the current price. Ask them if they have any ideas on which stocks will go up in the next few minutes and discuss why. Distribute a Daily log sheet and explain what to track daily for the next ten days. Day Ten Students should create an account and continue trading stocks for the next ten days. The richest shareholder will be announced and rewarded on the tenth day. 14 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

15 Class Discussion How to judge stocks? Day Eleven Discuss how to judge stocks and make smart investments II. Process: Lead an open discussion on how everyone s experience has been in trading stocks on WeSeed. Talk about Warren Buffet s rule invest in what you know. Explain to students that they more they know about a company, more they can trust buying its stocks. Emphasize that a company s P/E ratio, its Dividend and Yield, and Balance Sheet should be closely watched to make the best decision whether to buy its stocks or not. Students should continue buying and selling stocks through their WeSeed account. One company s stock price should be tracked for an entire week. The value line should then be referred to see if the predictions march. 15 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

16 Governmental role in the Stock Market Discuss the Government s role in the Stock Market. Day Twelve II. Process: Start with a short anecdote from history or a personal experience describing what would happen if there was free market and free trade allowed in a nation. Explain and discuss what the government s role is in the Stock Market. Explain and discuss about the SEC or the Securities and Exchange Commission. Discuss few articles on governmental actions in the Stock Market within the past year. Discuss about the Stock Market Crash in 1929 and Franklin D Roosevelt s New Deal policies to stabilize the nation. Talk about the recent recession and the current President, Barrack Obama s actions to improve our country s economy. Think and write a paragraph on how far the American government should interfere in Investing and the Stock Market, making sure that it does not upset the capitalistic mind set of the Americans. 16 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

17 Value Investing and Growth Investing Day Thirteen Make students understand about Value Investing and Growth Investing, and explain what the difference between the two is. II. Process: Begin discussion with this question: Which companies are doing well? Discuss any new companies and their growth potentials. Examples: Netflix, Google. Explain about Value Investing and Growth Investing with examples. An example of a value Investing Company is Coca-Cola. Answer the following question: What companies are going to grow the fastest in the next two years? 17 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

18 Project: Company Trends Day Fourteen Discuss the WeSeed Daily Log sheet and observe growing and dropping stocks. Discuss possible reasons for it. Explain the new Project Company Trends and discuss its benefits. II. Process: Discuss about the Daily Log Sheet for a few minutes. Ask for any concerns in trading stocks on the WeSeed. Handout guidelines for the Project. This will be a group project with three to four members each. Each group will be assigned one company and asked to research the company s history and its stock trends for the past years (since it began). A poster describing the company with numerical data should be presented to the class. Entertain any questions or doubts. Pass around samples of the project. Start working on the Project. Project Presentations will be held on Day Seventeen, after two days. 18 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

19 Jeopardy and Short Quiz Discuss goal of the Jeopardy and Quiz Play Jeopardy Have quiz after a ten minute break. Day Fifteen II. Process: Conduct an entertaining and useful Jeopardy game. Students should take a short quiz after the Jeopardy. III. Homework: Keep an updated profile on WeSeed and report in your daily log sheet. Mark the positives and negatives. 19 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

20 Influential Investors Warren Buffet, Stock market history Discuss the world s richest people and how they made their riches by owning stock in their own companies. II. Process: Discuss the following questions. Who are the world s richest people? o Carlos Slim Helu o William Henry Gates o Warren Buffet Day Sixteen Answer the following question: How is the world s richest man rich, and how did he make his fortune? 20 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

21 Project Presentations I. Objectives Present all the Projects and have discussions. Discuss the importance of the project Day Seventeen II. Process Presentations should be given a limited time and graded on the following basis: Amount of research/knowledge of the Company Poster and Oral Presentation Creativity and Originality After all groups have presented, each of the companies should be discussed. The best presentation may be awarded extra credit points. Importance of this project should be discussed. Opinion and critics for the project should be asked. III. Homework Continue trading in WeSeed and keep up with the Daily Log Sheet. The richest stockholder will be announced tomorrow. 21 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

22 WeSeed Challenge ends - Declare Winner, Discuss Patterns Present a winner for the Stock Market Challenge. Ask for feedback for WeSeed. Discuss any patterns found. Discuss Good/Bad Stocks. Day Eighteen II. Process: Present the name of the winner of the competition. Ask the students what they thought about for WeSeed, and deltas that they strongly believe in. Ask for their records of the stocks they were following and discuss the Daily Log Sheet. Discuss ways to improve WeSeed. Discuss any patterns found while buying and investing in stocks. Keep current news on Wall Street and other Stock Markets. 22 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

23 Career Opportunities Investment Banker Have an open discussion on career opportunities involving Investing and the Stock Market. Invite an Investment Banker as a guest speaker to have an open discussion with the students. II. Process: As the course is concluding, it is important to review the different job opportunities available with Investing and the Stock Market. One such opportunity is that of an Investment Banker. Discuss the following with the guest speaker: What is an investment banker? What do they do? What are the qualifications you need to be a successful investment banker? What happened before investment bankers were around? Who do they represent? Why do we need investment bankers? How do they help us? Make sure any further questions are discussed. Day Nineteen Find examples of famous investment bankers. Research how they have become successful. Think about pursuing Investment Banking as a career. 23 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

24 Day Twenty Class Feedback and Farewell Party Discuss what students have learnt from this course Discuss possible ways to improve this course. Have an enjoyable party! II. Process: Present all the students with certificate completing this course on Investing and the Stock Market. Have an open discussion on what progress each student has made Organize and enjoy the party! Keep an eye on the news for changes in stock prices. Continue trading in the virtual stock market at WeSeed. Buy a few stocks and become a smart investor! 24 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y

25 Conclusion We thank you for considering our lesson plan as one that could be used to teach students all around the nation about Investing and the Stock Market. Make sure that the homework assigned for each day is checked and reviewed on the next day. Make any alternations to this lesson plan to suit your individual requirements. Do check out our sample Jeopardy games and quizzes. 25 P a g e J o h n P. S t e v e n s H i g h S c h o o l. E d i s o n. N e w J e r s e y